b) Given the following national income modelY = C +1+GC = c, + c,YaYa = Y – TT = to + t,Y1 = l,G = GoCo = 100; I, = 80; c, = 0.8; Go = 300; t, = 250; t, = 0.2i) Name the endogenous and exogenous variables in the modelii)Find the equilibrium income, Ỹ

Variables that are explained in the model are known as endogenous variables and the variables that…

b) Given the following national income model Y = C +1+ G C = c, + c¿¥a Ya = Y – T T = t, + t,Y | = l, G = Go Co = 100; 1, = 80; c, = 0.8; G, = 300; to = 250; t, = 0.2 %3D i) Name the endogenous and exogenous variables in the model ii)Find the equilibrium income, Ỹ

b) Given the following national income model Y = C +1+ G C = c, + c¿¥a Ya = Y – T T = t, + t,Y | = l, G = Go Co = 100; 1, = 80; c, = 0.8; G, = 300; to = 250; t, = 0.2 %3D i) Name the endogenous and exogenous variables in the model ii)Find the equilibrium income, Ỹ

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: QUESTION 3 This question explores some of the points discussed in Topic 3 (Romer model). It is also…

A: Operations Management Bentonville Brewing Company makes a variety of polychrome beers at the brewery…

Q: Question 3: From the data for the period 1971-I to 1988–IV for Canada, the following regression…

A: A problem of spurious regression generally occurs in series of time data that is non-stationary. A…

Q: Question 3: National Income Determination Model Consider the…

A: exogenous variable are those variable which are not in your control (or not explained by the model)…

Q: = 42. Suppose the parameters of the Romer model take the following values: A, 10, 7= 0.01, ₺= 1/500,…

A: per capita income is a method by which we calculate the income earned by per person in the country…

Q: 7. Consider a growth regression. Suppose the regressors include, besides initial GDP per capita, a…

A: In regression analysis on e dependent variable depend on the other independent variables.…

Q: The circular flow model for goods and services is where... i. the households sell their factors of…

A: The gross domestic product (GDP) is generally defined as the market value of all the final…

Q: If the annual rate of world oil consumption t years after 1970 is modeledby the equation R(t) =…

A: In economics, consumption refers to the use of goods and services. The expenditure made on the…

Q: Consider the model: yt = α0 + b0st + b1st-1 + b2st-2 + b3st-3 + ut. What is the effect of a…

A: We will discuss concepts such as Finite distributed lag model and Long run multiplier to answer this…

Q: Using a three sector open circular flow of income model: a. Explain what is meant by equilibrium…

A: a. In circular flow of income, equilibrium is a point when flows of money corresponding to the flows…

Q: The diagram shows what happened to the consumption of lamb in the UK over the period 1974– 2015. How…

A: The initial model fitted to the annual data for the years 1974 - 2014 is given by : (1).

Q: Q.1.7 In most developing countries, the share of young people in the total population is larger than…

A: Saving is the that part of income which is not consumed . Saving is influenced by the age factors of…

Q: 19. Real national income means: (a) national income at current prices (b) national income at factor…

A: GDP Deflator: It is simply the ratio between the real GDP and the nominal GDP of a country. It shows…

Q: In the kingdom of Dreamland, the following data were recorded for the past three years: Tax revenues…

A: Year Tax revenues(X) Gdp(Y) X2 Y2 XY 1 2 -7 4 49 -14 2 -3 9 9 81 -27 3 4.5 10 20.25 100 45 4…

Q: Consider the following three-sector national income determination model assuming equilibrium in the…

Q: Suppose you are employed by the Central Bank and given the task to analyze saving behavior of the…

A: We are going to use linear regression analysis to answer this question.

Q: A good predictor of future cash flows includes: Select one: a. net income in past year b. cash…

A: Cash flows: Cash flow has the inflow and outflow of the cash transactions in a company during an…

Q: Given the national model Y= C + Io + Go + Xo - z C= Co + bYd Yd= Y - To Z= Zo + zY Explain the…

A: The national income is the gross domestic product. It is the market value of all goods and services…

Q: Q#2 Given the nation income model Y=C+1,+G, + X,-Z C= C, +bYa Ya =Y - T, Z = Z, + 2Y Explain the…

A: Macroeconomics analyzes the economy as a whole. It studies aggregate economic concepts such as…

Q: One of the assumptions of the classical regression model is the following no explanatory variable is…

A: Linear relationships can be communicated either in a graphical arrangement or as a numerical…

Q: Let the national income model be; Y = C + I0 + G , C = a + b ( Y – T) , G = g Y…

A: National income model determines the level of production or income generated in the economy in terms…

Q: Q2: Solve the national-income model by matrix Inversion: ? = ? + ?0 + G … … … … … … … … … … . . … .…

A: The technique of determining the matrix B that fulfils the previous equation for a given invertible…

Q: Rewrite the National Income model from the following equations and find the coefficient matrix if…

A: Y = C + I +G Y - C = I+G C= Y-I-G C = 25 + 6Y0.5

Q: Consider the following national income model : Y = C + I + Go C = 224 + 0.55Y 3.1I = 184 + 0.22Y…

A: Y = C + I + Go C = 224 + 0.55Y 3.1I = 184 + 0.22Y Where Go = 187 Y = C + I + G0or Y = C + I + 187or…

Q: Suppose you have quarterly data on new housing starts, interest rates, and real per capita…

A: Housing starts implies new construction projects of residential complexes. It implies a leading…

Q: In a particularly small region in the Philippines, the consumer price index C depends on E, the…

A: Inflation means the rise in the price level of goods and services over a period of time. It means…

Q: The GDP deflator for this year is calculated by dividing the using by the using and multiplying by…

A: Since: Since you have asked multiple questions, we will solve the first question for you. If you…

Q: In the circular flow model an example of a government spending flow would be collecting taxes O…

Q: 3- Given the way the MPI is designed, there are some aspects that may not be captured. For instance,…

A: True the Master Patient Index (MPI) is one of the tools that discusses about the broad function and…

Q: Classify each one of the following variables as either measurable (continuous) or categorical. If a…

A: If a variable can take all possible values within a range of values then it is known as a continuous…

Q: Circular flow of income in a two sector model implies- (A) Payments from households to firms and…

A: In economics, the relevancy of any theory or model depends upon their assumption and specfiic…

Q: Gross Investment. .$1,200 Which of the following statements is correct? O The country's GDP Is…

A: here we calculate the value of GDP by using the given information and also change in NDP so the…

Q: Consider a national income model as: Y= C + I0 + G Y= National Income C= (Planned) Consumption…

A: The expenditure method is a framework for ascertaining total national output (GDP) that investment,…

Q: Suppose the relationship between the government's tax revenue (T) and national income (Y) is…

A: Given the equation that shows the relationship between the tax revenue and national income. T = 10 +…

Q: As you know, the consumption of opioids in the US has been matter of great medical concern. A study…

A: Given: C= Consumption in thousands of drug pills. t= time in years starting 3 years ago

Q: In a particular very small region, the consumer price index, C, depends on the current value of…

A: Given information C=100+e-EPF where, C = Consumer Price Index E = Gross Domestic Regional…

Q: -income

A: This is the concept of purchasing power.

Q: In a particular very small region, the consumer price index, C, depends on the current value of…

A: Given, The formula for consumer price index (C) is given as: C=100+e-EPF where, E= Gross regional…

Q: Consider the following national income model : Y = C + I + Go C = 102 + 0.6Y 3.3000000000000003I…

A: Note:- Since we can only answer up to three subparts, we'll answer the first three. Please repost…

Q: The regression results below show the relationship between GDP (Y) and private consumption (X) for…

Q: What type of solutions do you get in Samuelson´s Model of national income when the parameters…

A: A Multiplier is defined as an economic factor which when increased or changed in any way causes a…

Q: 1] kindly tell the difference between log -linear , linear - log ,log -log and linear - linear…

A: We are going to analyze differences among the various forms of regression models.

Q: Q#2 Given the nation income model Y = C + Io + Go + X0 − Z C = Co + bYd Yd = Y − T0 Z = Z0 + zY…

A: The equilibrium level of national income and the other macroeconomic elements allow for suitable and…

Q: Define simultaneous causality bias. Explain the potential for simultaneouscausality in a study of…

A: Simultaneous bias is a threat to internal validity in a causal analysis. It occurs when the…

Q: Suppose you decide to estimate a student consumption function. After you run an OLS regression on…

Q: 1. If "Apparent Consumption" is adjusted with captive consumption and effect of abnormal factors,…

A: Answer -

Q: a. Explain 3 methods of calculating national income. b. Explain why the Gross Domestic Product…

A: National income is defined as the total income earned by a nation residents in the production of…

Question

b) Given the following national income model
Y = C +1+G
C = c, + c,Ya
Ya = Y – T
T = to + t,Y
1 = l,
G = Go
Co = 100; I, = 80; c, = 0.8; Go = 300; t, = 250; t, = 0.2
i) Name the endogenous and exogenous variables in the model
ii)Find the equilibrium income, Ỹ

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Consider the following national income model : Y = C + I + Go C = 102 + 0.6Y 3.3000000000000003I = 253 + 0.21Y Where Go = 184 (i) Identify the exogenous variable/s. if there are more than one variable, separate each variable with a comma Convert this system of equations in matrix form. (ii) What is the determinant of the coefficient matrix? (Give your answer to 'three' decimal places, if possible) (Note: you can use either inversion or Cramer's rule to find the values of Y, C, and I.) (iii) What is the equilibrium value of Y? (Give your answer to 'three' decimal places, if possible) (iv) What is the equilibrium value of C? (Give your answer to 'three' decimal places, if possible) (v) What is the equilibrium value of I? (Give your answer to 'three' decimal places, if possible)
(c) Consider the following macroeconomic model Y = C + 1 + Go C = 40 + 0.8Y I = 0.1Y How many degrees of freedom does the system have? Given that Go is exogenous government expenditure, find the equilibrium solutions for Y, C and I. b(i) hand written plz (ii)
Which one of the following statements is FALSE?(a) There are four broad groups of decision‐making units in the economy:households, firms, government and the foreign sector;(b) Savings are an important injection into the circular flow of income andMultiple‐choice questions: Select one correct answer for each of the following. In your answer booklet, write down only the number of the question and next to it, the letter of the correct answer.spending in the economy;(c) Taxes are a leakage or withdrawal from the flow of income and spending in the economy;(d) Spending by households on consumer goods and services is calledconsumption spending.
Consider the following three-sector national income determination model assuming equilibrium inthe economy: C = 20 + 0:85 (Y ? T)T = 25 + 0:25YI = 155G = 100 1. Determine the exogenous and endogenous variables in the system. 2. Solve the model presented in the above system of equations using the matrix inverse and the Crammer's rule for the equilibrium values of the unknown variables. 3. Verify your solution in part (2) above by solving these simultaneous equations.
(1.4) Consider the following IS-LM model: I Y=C+I+G C=100+0.4(Y-T) I= 150 +0.2Y - 4,000r r = 0.01 with G = 200 and T = 100. (a) Derive the IS curve and draw it in an appropriate diagram. (b) Calculate the equilibrium values of Y, C, I and r. (c) What is the impact of decreasing government spending to G' = 180 in terms of the new equilibrium value Y"? (d) Suppose the central bank decides it wants to counteract the restrictive fiscal policy. What exactly (i.e. we look for graphical and numerical answers) can the central bank do in order to keep equilibrium output at the value obtained for Y in (b)?
EXERCISE 3.5 1. Given the following model: Y = C÷lo+Go C = a + b(YT) (a> 0, T = d+tY (d>0, 0 0, 0
3) You want to study the effects of disposable income, anti-smoking advertising and cigarette prices on the per capita consumption of cigarettes in US. You collect data on these variables across the 51 states over 20 years. You thus have 51x20=1,020 data points. For each state and year, you measure: Y=per capita consumption of cigarette (the fraction of the state population that smoked in that year); Xı=per capital income in the state (in US$); Xx=total expenditure in anti-smoking advertising in that state (in USS); and X3=average cigarette price in the state (in US$). You can then run a model: Y= Bo+Bi*X++ B2*X+ B3*X3+e Explain how you would test that the model is useful in predicting Y: How you would test the alternative hypothesis that you have at least one of the coefficients B1, ß2 or ß3 is different from zero. (That is, the null is that all three coefficients are zero.) Use a significance level a=0.05. (Again, there is no need to “run" the data. Just explain what you would do.…
Look over the following equations and decide whether they are linear in the variables, linear in the coefficients, both, or neither: a. Y; = Bo + BiX+ Ei b. Y = Bo + B,InX,+ €i c. InY = Bo + B,InX;+ E d. Y; = Bo + BiX+ E e. Y = B1 + BX+ E
Consider the system of equations: pi = β0 + β0qi + β2ti + β3zi + ui qi = α0 + α1pi + α2ki + ԑi where p and q are endogenous variables.t, z and k are exogenous variables.u and ԑ are disturbance terms. And i is cross section. Explain how you would go about estimating the stated system of equations.
For the specific national income model given Y= C + I, + G, C=60 + 0.9(Y-T) T=30+0.2Y where I, =31 and G, = 20, find the values of the endogenous variables solving by matrix inversion
Consider the two-sector macroeconomic model of a fictitious country: dy dt C = 0.5 Y + 540 I = 425 Where C = consumption; I = investment and Y = national income. = 0.034(C+I - 0.6 Y) Determine the following: (a) If Y(0) = 14,000, find an expression for Y (t) by solving the differential equation. (b) Find the time taken for income to fall to 13,000. (c) Is the system stable or unstable? Explain your answer.
Circular flow of income in a two sector model implies- (A) Payments from households to firms and back again (B) Payments from firms to firms arit 11 (C) Payments from households to households (D) Payments from households to firms ( Latinss