uestion 1. Consider a simple Keynesian income-spending model of an econ

01 Jun uestion 1. Consider a simple Keynesian income-spending model of an econ

Posted at 01:41h in Essay Writing Services by Past Papers

uestion

1. Consider a simple Keynesian income-spending model of an economy described by the following equations
C = 210 + 0.75Yd
= 300
= 425
= 120
= 100
M = 0.15Y
= 250

(a) Calculate the equilibrium level of income.

(b) Sketch this equilibrium position using a two-dimensional graph.

(c) Suppose the government reduces public expenditure on goods and services by 25. Estimate the change in the equilibrium level of income. What is the new equilibrium level of income?
[All calculations to one decimal point]

2. Consider an IS/LM model of an economy with the following equations:
C = 300 + 0.6Yd
I = 100 – 5i
= 200
= 100
T = 0.2Y
L = 0.5Y – 30i
/ = 500

(a) Using the above data, derive the equation for the IS schedule.

(b) In this example, what is the equation for the LM schedule?

(d) What is the value of the monetary policy multiplier with respect to income and interest rates? If the money supply is increased by 100, what are the new market-clearing income and interest rate levels?

[All calculations to two decimal points]

Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.

Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.

Do you need an answer to this or any other questions?

About Writedemy

We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.

How It Works

To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.

Are there Discounts?

All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.

Hire a tutor today CLICK HERE to make your first order

Print page