Suppose the economy is characterized by the following behavioral equation:                 Y = C + I + G + (X-M) Equilibrium condition                 C = 2000 -f' 0.75Yd Consumption equation                  I = 4000 Investment expenditure                 G = 4100 Government Expenditure                  X = 2800 Export                  M = 400 + 0.25Y Import equation                  T = 100 + 0.3Y Tax equation                 Yd = disposable Income Required: Derive Balance of Payment (BP) curve and explain why it slopes upwards Compute equilibrium national income and Imports for the economy. Differentiate between the closed-economy model and the open economy model

Given the following model of an Economy as follows:- (10 marks) C = 50 + 0.7 Yd (Yd = Y-T) (Consumption & Expend) I = 100 (Investment Expend) X = 20 (Exports ) M = 10 – 0.27 (Imports) T=25 interepret the consumption Function i) Determine Equilibrium level of National Income ii) Consumption level at Equilibrium level of Income iii) Total import at equilibrium Income

This problem examines the implications of allowing investment to depend on output. Suppose the economy is characterized by the following behavioral equations: C = c, + c,YD Y, = Y-T |= bo + b,Y Government spending and taxes are constant. Note that investment increases with output. co is autonomous consumption, C, is the propensity to consume, and bo is business confidence. Solve for equilibrium output. Y = (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a subscript can be created with the_ character.)

Q2. Suppose an economy is represented by the following equations. Z=C+I+G C = 300 + 0.5 YD T= 400 I 200 G 1000 (a) Given the above variables, calculate the equilibrium level of output (Y) and illustrate the equilibrium level of output for the economy using the diagram below: Aggregate Demand (Z) 450 (b) Now assume that consumer confidence increases causing an increase in autonomous consumption from 300 to 400. What is the new equilibrium level of output? (c) Graphically illustrate (in the above graph) the effects of the change in autonomous consumption on the aggregate demand line and equilibrium Y. Clearly indicate in your graph the initial and final equilibrium levels of output. (d) Briefly explain why this increase in output is greater than the initial increase in autonomous consumption.

Assume that Consumption is C = c(Y-T); Taxes T = tY; Investment / = -bi; and Government expenditure (G) is exogenous. Determine the multiplier for an increase in the tax rate.

Assume that Consumption is C=CO+c(Y-T); Taxes T=tY; Investment 1-10-bi; and Government expenditure (G) is exogenous. Determine by how much equilibrium income changes in the case of an autonomous increase in consumer confidence.

This problem examines the implications of allowing investment to depend on output. Suppose the economy is characterized by the following behavioral equations: C=C₁+C₁YD YD=Y-T 1=b₁ + b₁Y Government spending and taxes are constant. Note that investment increases with output. Co is autonomous consumption, is the propensity to consume, and bo is business confidence. C1 Solve for equilibrium output. Y= (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a subscript can be created with the character)

Let the national income model be; Y = C + I0 + G ,      C = a + b ( Y – T) ,         G = g Y Identify endogenous variables Find the equilibrium national income Find equilibrium consumption(using static equilibrium & matrix algebra both

Demand Supply Supply Demand LOANABLE FUNDS (Billions of dollars) Scenario 1: Individual Retirement Accounts (IRAS) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is an increase in the maximum contribution, from $5,000 to $8,000 per year. Shift the appropriate curve on the graph to reflect this change. This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to and the level of investment spending to Scenario 2: An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit. Shift the appropriate curve on the graph to reflect this change. The repeal of the previously existing tax credit causes the interest rate to and the level of investment to Scenario 3: Initially, the government's…

supply equation is Y - Ypot + 80 (P-Pe), where Ypot is the potential level of output. In 2016, the population was 400 million, and the structure of the economy was described by the following equations for household consumption behavior and taxes received: C = 100+ 0.8DI, and T = 0. where all monetary values are in billions of dollars. Government spending was fixed at $1700 billion, and firm's investment behavior was fixed at $800 billion. Trading is allowed in this economy and in 2016, trading occurred such that the trade account was balanced. That is, net exports (X-IM) was equal to zero. (Question 15 of 20) Now consider that in in the following year (2017), the government decided to implement a policy aimed at moving the economy to full employment. In its decision to move the economy to full employment, they used government spending as the policy tool. The structure and fixed spending behaviors remain the same as they were in 2016, except for government spending. In addition, changes…