Consider the following Model (notation is standard): C=c(y-τ) I=i(r) y = C+I+G Md/P = L(y, r) Md= Ms=M y = f(n) n = h(W/P) f´(n) = W/P Calculate the effects of a change in τ on C, I, r, y and P.
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Consider the following Model (notation is standard):
C=c(y-τ) I=i(r) y = C+I+G Md/P = L(y, r) Md= Ms=M
y = f(n) n = h(W/P) f´(n) = W/P
Calculate the effects of a change in τ on C, I, r, y and P.
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- Consider the following Cobb-Douglas production function for the bus transportation system in a particular city: Q=aL B₁F B₂K B₂ where L = labor input in worker hours, F = fuel input in gallons, K = capital input in number of buses, and Q = output measured in millions of bus miles. Suppose that the parameters (a, B₁, B2, and B3) of this model were estimated using annual data for the past 25 years. The following results were obtained: a = 0.0012; B₁ = 0.45; B₂ = 0.20; and B3 = 0.30. Determine the labor, fuel, and capital input production elasticities. Input Production Elasticities Labor Fuel Capital Suppose that labor input (worker hours) is increased by 1% next year (with the other inputs held constant). What is the approximate percentage change in output? Suppose that capital input (number of buses) is decreased by 3% next year (when certain older buses are taken out of service). Assuming that the other inputs are held constant, what is the approximate percentage change in output? %…T. Haavelmo devised a model of the US economy for the years 1929–1941 based on the followingequations:(i) c = 0.712y + 95.05 (ii) s = 0.158(c + x) − 34.30(iii) y = c + x − s (iv) x = 93.53Here x denotes total investment, y is disposable income, s is the total saving by firms, and c istotal consumption. Write the system of equations in the form (1) when the variables appear inthe order x, y, s, and c. Then find the solution of the system.Consider a simple linear regression model, y = Bo + Bix+u.. What does the zero conditional mean assumption imply? The estimated average value of 31 is zero The expected value of the explained variable, y, is zero, regardless of what the value of the explanatory variable, x, is The expected value of the error term, u, is zero, regardless of what the value of the explanatory variable, x, is The estimated average value of 30 is zero
