Consider an economy where the natural rate of unemployment rate is 5% and real GDP at full employment is $3.50 billion. Consumers' spending behavior is described by the equation: C = 150+ 0.75DI, while firms investment behavior is described by the equation 1 = 300+ 0.2Y - 750r. Trade is allowed and currently imports are defined by the equation IM = 250+ 0.2Y. In 2016, exports is fixed at $300 million and government spending is fixed at $800 million. Furthermore, in the same year, tax rate is 20% and the interest rate is 8%. (Question 2 of 15) What is the trade balance (in millions of dollars) in 2016? (report your answer to 2 decimal places)

Consider an economy where the natural rate of unemployment rate is 5% and real GDP at full employment is $3.50 billion. Consumers' spending behavior is described by the equation: C = 150+ 0.75DI, while firms investment behavior is described by the equation 1 = 300+ 0.2Y - 750r. Trade is allowed and currently imports are defined by the equation IM = 250+ 0.2Y. In 2016, exports is fixed at $300 million and government spending is fixed at $800 million. Furthermore, in the same year, tax rate is 20% and the interest rate is 8%. (Question 2 of 15) What is the trade balance (in millions of dollars) in 2016? (report your answer to 2 decimal places)

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter8: The Keynesian Model

Section: Chapter Questions

Problem 19SQ

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Consider an economy where the natural rate of unemployment rate is 5% and real GDP at full employment is $3.50 billion. Consumers' spending behavior is described by the equation: C = 150 + 0.75DI, while firms' investment behavior is described by the equation I = 300 + 0.2Y - 750r. Trade is allowed and currently imports are defined by the equation IM = 250 + 0.2Y. In 2016, exports is fixed at $300 million and government spending is fixed at $800 million. Furthermore, in the same year, tax rate is 20% and the interest rate is 8%. (Question 5 of 15) Describe the economy in 2016. (complete the sentences below) In 2016, the economy is in v gap, and unemployment is v the natural rate of unemployment. The government is operating with v and the international segment of the economy has
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The national income (Y) of a country has the form: Y = 0.48K0.4L0.3NX0.01 Where: K is capital, L is labor and NX is net exports. a) How will a 1% increase in labor affect income? Is there an opinion that reducing the labor rate by 2% can increase net exports by 15% while keeping income unchanged, is this true or false? b) Let NX's growth rate be 4%, K is 3%, L is 5%. Determine the growth rate of Y.
The table below shows the parameters for the economy of Hutu. Give your answers to one decimal point. XN = 160 0.15Y G = 220 C = 40 + 0.65Y I = 150 a. The value of equilibrium income is $ b. If exports were to increase by 40, the new value of equilibrium income would be $ c. Given your answer in part (b), the new value for XN is $ d. Given the equilibrium income in part (a), if full employment income is $800, what change in government spending is necessary to move the economy to this level? Government spending needs to decrease by $. A
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The table below shows the parameters for the economy of Hutu. C = 70 + 0.6Y XN = 150 - 0.1Y I = 140 G = 240 a. The value of equilibrium income is $ b. If exports were to increase by 90, the new value of equilibrium income would be $ C. Given your answer in part (b), the new value for XN is $ d. Given the equilibrium income in part (a), if full employment income is $925, what change in government spending is necessary to move the economy to this level? Government spending needs to (Click to select) v by $ Next > 18 of 33 < Prev
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A futures market trades contracts on the growth rate for nominal GDP. The contract pays $X to the buyer, where X is 100 times the growth rate in nominal GDP from last year to this year. For example, if nominal GDP grows by 1% over last year, the contract pays $100 (1 x 100). Nominal GDP last year was $28,909 billion. Contracts on the futures markets are currently selling for $513. What is the market's prediction for nominal GDP this year? Put your answer in billions. You may round to two decimal places.
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