Econ 104 Essay 3

True or false question: Although there is no specific founder of macroeconomics, John Maynard Keynes is usually cited as such.

7. 1. Consider a neoclassical growth economy described by the following.•Yt = K0.3t ·L0.7t (aggregate production function)•s = 0.35 (saving rate)•δ = 0.10 (depreciation rate)•n = 0.01 (population growth rate)•L1 = 120 (initial population)•K1 = 160 (initial capital stock)•g = 0 (technological growth rate)Compute K, Y , k, y, and c for the first three periods. Please report numerical answersto two decimal points.  (a) K1 = ; Y1 = ; k1 = ; y1 = ; c1 =(b) K2 = ; Y2 = ; k2 = ; y2 = ; c2 =(c) K3 = ; Y3 = ; k3 = ; y3 = ; c3 =

John Maynard Keynes spearheaded a new school of macroeconomic theory during the Great Depression. Which of the following represents a Keynesian point of view of macroeconomics?

Consider an competitive economy with interest rate r =MPK=0.05,capital depreciation rate o = 0.03, technology growth rate g = 0.03, and populationgrowth rate n = 0.02(1) Why should we be interested in the Golden Rule steady state of an economy? (2) Is the economy depicted above running on its Golden Rule steady state? If yes,explain how you get your answer. If no, what should the government do to achievethe Golden rule steady state?(3) It is said that the Golden Rule steady state gives the greatest growth rate of consumption per capita. True or False? Explain your answer.(4) It is said that population is usually a burden to economic growth. So if we canreduce the population growth rate from n = 0.02 to n = 0.01, everyone will be betteroff, in the sense of enjoying greater growth rate of consumption in the new GoldenRule steady state. True or False? Explain your answer.

Discuss the following questions in 1 paragraph each: Why/how has Covid-19 led to a global economic recession?  While the originating place of Covid-19 was China, why do you think Western countries have experienced a sharper economic recession than China?  As per the definition(s) of recession that we discussed in Chapter 13 of the Econoomy from CORE, do you think Afghanistan is currently in a recession?

Figure 1: Hayek’s (Classical) AD-AS Model 1.1. Hayek says that markets will heal themselves and that government should not intervene. How does the AD-AS model reflect Hayek’s idea that governments cannot increase real GDP beyond the level that the free market economy is able to produce?   1.2. Do you believe that the Hayek’s classical AD-AS model explain the factors that cause changes (shifts) in AS realistically? Why or why not?       Figure 2: Keynes’s AD-AS Model 2.1. In Figure 2 above, what are the factors that may cause the aggregate demand to shift from AD to AD1? What is the difference between demand pull inflation, cost push inflation and recession? 2.2. In macroeconomics, the immediate short run is known as a length of time when both input prices and output prices are fixed. In the short-run, input prices are fixed but output prices are variable. In the long run, input prices and output prices can vary. Describe the AS curve in the Immediate Short run. Describe the AS curve…

Briefly explain how one or more of the microeconomic components, namely consumption,investment, supply and demand for money influence macroeconomic outcomes and formulations of the following macroeconomic theories:a. Solow Growth Model b. The Mundell-Fleming model c. Neoclassical Model of Investment Use mathematical equations and graphs where necessary.

Suppose that the annual rates of growth of real GDP of Econoland over a five-year period were sequentially as follows: 3 percent, 1 percent, −2 percent, 4 percent, and 5 percent. What was the average of these growth rates in Econoland over these five years? What term would economists use to describe what happened in year 3? If the growth rate in year 3 had been a positive 2 percent rather than a negative 2 percent, what would have been the average growth rate?

-Disposable income (DI) = GDP - NT 8. Imports (M) Rest of the world C+1 9. 7. Financial markets 10 5. Firms Governments Households 4. Taxes NT C+I+G+(X- M) = GDP Consumption (C) Investment () Saving (S) borrowing Government purchases (G) Exports (X) Government = GDP Aggregate income=0

QUESTION 5Imagine the following simple Keynesian macroeconomic model for a closed economy.TD = C + Ip + G (total demand)C = C0 + YD (aggregate household consumption)YD = Y − T (aggregate household disposable income)Ip = I0 + aY − bR (aggregate planned investment)Y = TD (output, equilibrium condition)BB = T – G (government budget balance)With:G government consumption, T taxes, R real interest rate (exogenous variables)C0) and I0 autonomous consumption and investment0 < a, c, a+c < 1, b > 0 constant parametersDerive the equation for output and answer the following question. If the government in this model simultaneously increases its consumption G and its taxes T by the same amount, then: total demand decreases, and equilibrium output declines. total demand decreases, and equilibrium output declines, but only if C > G. total demand increases, and equilibrium output rises. The rise of output is stronger the higher the households’ marginal propensity to consume. total demand…

Correct Answer You Answered Question 2 Consider the following Malthusian Model. Suppose that output in the economy is described by Y = √X√L. with Y being aggregate output, X being the total amount of land, and I being the total amount of labour. The amount of land is fixed at 17,920. Suppose you are also told that the relationship between consumption per worker and labour is: Lt+1 = = (c - 15) × Lt. What is the steady state level of labour L* here? (Hint: what is Lt+1 in the steady state?) Lt 70 Ⓒ90 80

Economics 1. Suppose an economy that produces two goods experiences an increase in its stock of labor. Will this increase of labor cause a rise in output of both industries according to the: Ricardian model, Specific factors model, Heckscher-Ohlin model

8,Q3) Hey, need help with the following multi-part macroeconomics problem. Thank you in advance! Explain how the equilibrium real interest rate and the equilibrium quantity of credit would change in each of the following scenarios and illustrate your answer with a well-labeled graph of the credit market. As the real estate market recovers from the 2007–2009 financial crisis, households begin to buy more houses and condominiums, and they apply for more mortgages to enable those purchases. Congress agrees to a large tax cut which increases the level of the government deficit. Households begin to fear that a growing pandemic may cause them to lose their jobs and they increase their savings for a rainy day. Businesses become more optimistic about the future of the economy, and decide to distribute more of their earnings as dividends to their shareholders.

Intermediate macroeconomics: Using examples and clearly labeled graphs where applicable answer the following questions clearly and detailed.   What argument, based on macroeconomic theory, might a government use to justify shutting down a newspaper critical of its policies? If you were asked to provide a counterargument, what would it be? Explain.

Explain how each of the following events or policies will affect unemployment in a neoclassical model: a rise in income levels for consumers throughout the economy cheaper imported products a fall in government spending

Identify each of the following topics as being part of microeconomics or macroeconomics: the impact of tax policy on national saving (a) macroeconomics (b) microeconomics

Suppose that output is given by the neoclassical production function Y (t) = F (K(t), L(t), A(t)) satisfying Assumptions 1 and 2, and that we observe output, capital, and labor at two dates t and t + T . Suppose that we estimate TFP growth between these two dates using the equation Where g(t, t + T ) denotes output growth between dates t and t + T , and other growth terms are defined similarly, while αK(t) and αL(t) denote the factor shares at the beginning date. Let x(t, t + T ) be the true TFP growth between these two dates. Show that there exist functions F such that x(t, t ˆ + T )/x(t, t + T ) can be arbitrarily large or small. Next show the same result when the TFP estimate is constructed using the end-date factor shares: Explain the importance of differences in factor proportions (capital-labor ratio) between the beginning and end dates in these results.  

The government of Prime Minister Shinzo Abe said it would offer some $15 billion in financing for businesses hit by the novel coronavirus and spend about $4 billion directly to prop up the economy.“As the top priority for the time being, we have to put all our effort into keeping businesses alive,” Mr. Abe said.Still, in a $5 trillion economy, the measures may not be big enough to dig the country out of a big hole. SMBC Nikko Securities economist Junichi Makino said he expected the Japanese economy to shrink at an annualized pace of 5.8% in the January-to-March period following a 7.1% contraction in the last quarter of 2019.Japan is set to offer emergency no-interest loans of about $1,900 to newly jobless people and others in trouble, and the borrowers may not have to pay the money back if they can’t find work. Businesses at risk from the virus can access financing or loan guarantees from the government   QUESTIONS:  1. How would the financing plan designed to supports businesses impact the…

Define equilibrium and steady state. Can we find a steady state for each dynamic general equilibrium model? Why or why not?

This question requires you to solve a macro model algebraically. Reading the appendix to this chapter will help you to answer this question. But, just in case, we lead you through it step by step. The equations for the model are as follows: i) C = c + MPC × YD consumption ii) I = I0 investment iii) G = G0 government purchases iv) T = tY net tax revenue v) X = X0 exports vi) IM = mY imports a. Step 1: Recall that Y D = Y – T. By using this fact, substitute the tax function into the consumption function and derive the relationship between desired consumption and national income. b. Step 2: Sum the four components of desired aggregate expenditure ( C, I, G, NX). This is the aggregate expenditure ( AE) function. Collect the autonomous terms separately from the induced terms. c. Step 3: Recall the equilibrium condition, Y = AE. Form the equation Y = AE, where AE is your expression for the AE function from part (b). (Your autonomous terms can be collectively labelled A and the terms that…

Economics In terms of Classical Economics and not Keynesian: World trade has boosted growth rates in many countries. In around 1980, mainland China opened its economy to trade and foreign investment. The Chinese also implemented many institutional reforms promoting capitalism. 1) Calculate Chinese pre-reform cumulative and annualized growth rates from 1950 to 1979. 2) Calculate Chinese post-reform cumulative and annualized growth rates from 1980 to 2019. 3) Please explain the differences in your calculated numbers using the changes the Chinese government implemented. Hint: Use Classical Economic fundamentals to determine the pre-reform cumulative and annualized growth rates for the above years and then explain them. The GDP and growth rates can be found online in many different places.

1. 2. Explain why macroeconomic analysis is particularly concerned with issues of economic growth, unemployment, inflation, and balance of payments? "Economic growth does not necessarily reduce the number of unemployed workers". Explain this statement.