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what is it that the three income hypothesis have in common, does it address the the deficiency in the Keynesian absolute income model?
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- 29. Given this model, what is the equilibrium level of income?What is the neoclassical explanation for the natural rate or the NAIRU? What does neoclassical theory say about income distribution and inequalityWhat is a random walk? How is Hall’s random-walk model of consumption related to the life-cycle and permanent-income hypotheses?
- What does neoclassical theory say about income distribution and inequalityWhat is consumption function? Differentiate between Keynesian consumption theory and Permanent income theory of consumption.according to neoclassical theory, what determines wages and the return to capital? How would a Marxist or Institutionalist take issue with such a description of income distribution?
- We call the model of income determination a Keynesian . What makes it Keynesian, as opposed to classical?What is supply-side or "trickle-down" economics? Why do Keynesians reject supply-side economics? Does the history of the marginal income tax structure in the U.S. support or challenge the idea of tickle down economics?Consider the following model of an economy operating with fixed wages, prices and interest rates and hasexcess capacity. Adsume all figures are I Zambian kwacha. C=100+0.8yd, T=100+25Y, G=980 and I= 500 Where c is consumption, yd is disposable income, T is taxes net of transformers, G is government spending on goods and services and I is investments. A. Calculate the equilibrium level of national income B. Illustrate your equilibrium in the keyneasian cross diagran C. What is the value of the multiplier D. Is governnent running a surplus or a deficit E. Show the impact of a reduction in government spending by 80 on the equilibrium level of national income F. Illustrate your new equilibrium in the same Keynesian cross diagram as in b.
