Q: In the classical model with fixed income (Chapter 3,) if households save less than firms invest,…
A: In the classical model, households provide the supply of loanable funds and demand for loanable…
Q: With the help of a diagram, explain the derivation of the TotalRevenue curve.
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Q: Find the value of consumption when autonomous consumption is 300 the value of MPC is 0.9 and income…
A: Generally in the given question Value of autonomous consumption = 300 Value of MPC = 0.9 Income =…
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A: The aggregate demand or expenditure is the total demand or expenditure in an economy over a period…
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A: Government expenditure is the spending done by the central or state governments, these include all…
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…
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Q: Consider the following model of national income determination C = 3000 + 0.75 (y- t) T = 1000 I=…
A: Equation for national income determination is Y =C + I + G + NX Given, C = 3000 + 0.75 (Y- T) T =…
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Q: Household consumption is affected by which of the following? Interest rato
A: Household consumption is affected by various factors.
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A: Please find the answer below.
Q: What happens to fixed income when per capita incomes increases
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A: Cash flows: Cash flow has the inflow and outflow of the cash transactions in a company during an…
Q: How does the life-cycle and permanent-income hypotheses resolve the seemingly contradictory pieces…
A: Income after tax rate is known as disposable income. The disposable income can be either saved or…
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A: This comparison is a phrase used in economics. It is used to describe how present actions influence…
Q: The national income model for an economy is represented as follows (units are in Ksh.M) Y = C + I +…
A: (Q)The national income model for an economy is represented as follows (units are in Ksh.M) Y = C + I…
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…
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Q: Assume a consumption function that takes on the following algebraic form: C = 100 + 0.8 Y. Assume…
A: Assume a consumption function that takes on the following algebraic form: C = 100 + 0.8 Y. Assume…
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A: Equilibrium in the market occurs where aggregate expenditure equals production.
Q: What are the two approaches to determine the equilibrium level of income in an economy?
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Q: Autonomous consumption is independent of income and must equal to zero True False
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Q: -income
A: This is the concept of purchasing power.
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A: PART 1: NOTE: Since we only answer up to 3 sub parts, we will answer the first 3.please resubmit the…
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Q: If actual GDP is $640 billion and there is a positive GDP gap of $20 billion, potential GDP is
A: Answer: Given, Actual GDP = $640 billion Positive GDP gap = $20 billion Potential GDP: It refers to…
Q: Who gave the relative income hypothesis of consumption?
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Q: with the aid of a diagram, explain the income and expenditure model
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Q: Describe in why measures of output do not always measure well-being. Include some specific examples.
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Q: suppose you are given a consumption, investment and government expenditure functions as C= 700 +…
A: C= 700 + 0.6Y I= 360+ 0.3Y and G= 440
Q: The equation for the aggregate consumption function is
A: The consumption function can be written as follows:
What type of solutions do you get in Samuelson´s Model of
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- 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)Consider the following model of national income determination C = 3000 + 0.75 (y- t) T = 1000 I= 4750 G = 1500 Y=E=C+I+G Solve for the equilibrium values for all the endogenous variables Suppose the government expenditure increased by 500 find the new equilibrium value Calculate the value of the government spending multiplierWith the help of a diagram, explain the derivation of the TotalRevenue curve.
- Consider a national income model as: Y= C + I0 + G Y= National Income C= (Planned) Consumption Expenditure I0= Investment G= Government Expenditure Consider Y= 20trillion, G= 4.2trillion, I0= 3.8 trillion. Explain the key elements missing from the National Income model. Add a new endogenous variable to represent that missing element or endogenize one of the exogenous variables to address this issue. C= a+ b(Y-T0) (a>0, 0<b<1) G= gY (0<g<1)10.14 Total economic output in three years. The n - vector xt denotes the economic output of a country in n different sectors, in yeart. An economist models the economic output using a linear dynamical system model xt+1 = Axt, where A is an n \times n matrix. Assuming her model is correct, find an expression for the total economic output in yeart + 3, in terms of xt and A. (The total economic output is the sum of the economic output in the n sectors.)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.
- What is the Euler equation for consumption, and what is its economicinterpretation?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, 0For a income determination model Y = C +I + G, C = Co + bY d, I = Io + aYd, Yd = Y – T, T = To +tY, G = Go, 0 < a, b, t < 1, find the equilibrium level of income. Find the multipliers for each input.Find the value of MPC if MPS is 0.4.Suppose you have quarterly data on new housing starts, interest rates, and real per capita income.Specify a model for housing starts that accounts for possible trends and seasonality in the variables.Calculate the value of MPS when the value of MPC is given to be as 0.25SEE MORE QUESTIONS