just need graph for (iv) please tY(t + 1) = 86a + (1 - a)Y(t) + 0.6aY(t− 1) — 2ar(t)r(t + 1) = -xx.xß +0.25Y(t) + (1 - 0.5p)r(t)01234567891012345678 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 4142434456F48 491147Y(t)190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190190r(t)555555555555555555555555555555555555555555555555556r3102040Monetary contraction6080alpha=beta =100Y1201401600.050.8180200 Consider the following dynamic IS-LM model.C(t) = 20 +0.8Y(t-1)(i) What is the equilibrium level of Y and r?(ii) Show that dynamic IS and LM equations are the recursive equations for Y(t+1) andr(t+1). That is,(iv)Ya(t) = Y(t) - Tx(t)Tx(t) = 5 +0.25Y(t)I(t) = 20 2r(t)G = 50E (t) = C(t) + 1(t) + GAY(t+1) = 0.05 [E(t) - Y(t)]Ma(t) = 10+ 0.25Y(t)0.5r(t)M,(t) = 55Ar(t+1)= 0.8[Ma(t) - Ms(t)]Y(t+1) = 86a + (1 − a)Y(t) + 0.6aY(t-1)-2ar(t)r(t + 1) = -45ß +0.25ßY(t) + (1 - 0.5B)r(t)where a = 0.05 is the speed of good market adjustment and ß= 0.8 is the speed ofmoney market adjustment. [Hint: Substitute all the relationships in each of theadjustment equations in turn. The algebra can be somewhat tedious but notintellectually difficult.]Suppose the Reserve Bank reduces the money supply (Ms) to 53.6 in period 2, given Y and rare at their equilibrium values in periods 0 and 1.(iii)calculate the new equilibriumoutput and interest rate. [Hint: The LM curve shifts left so you need to re-calculate thedynamic LM curve]this policy change?plot the trajectory of the economy resulting from

The IS-LM model is a macroeconomic model that shows the relationship between interest rates and…

Consider the following dynamic IS-LM model. C(t) = 20+ 0.8% a(t-1) Ya(t) = Y(t) - Tx(t) Tx(t) 5 +0.25Y(t) (iv) = I(t) = 20 – 2r(t) G = 50 (i) What is the equilibrium level of Y and r? (ii) Show that dynamic IS and LM equations are the recursive equations for Y(+1) and r(t+1). That is, this policy change? E (t) = C(t) + 1(t) + G AY(t + 1) = 0.05 [E(t) - Y(t)] Ma(t) = 10+ 0.25Y(t) 0.5r(t) M,(t) = 55 Ar(t+1)=0.8 [Ma(t)- M, (t)] Y(t + 1) = 86a +(1- a)Y(t) + 0.6aY(t-1)-2ar(t) r(t + 1) = -45ß +0.25BY(t) + (1 - 0.5ß) r(t) where a = 0.05 is the speed of good market adjustment and ß = 0.8 is the speed of money market adjustment. [Hint: Substitute all the relationships in each of the adjustment equations in turn. The algebra can be somewhat tedious but not intellectually difficult.] Suppose the Reserve Bank reduces the money supply (Ms) to 53.6 in period 2, given Y and r are at their equilibrium values in periods 0 and 1. (iii) calculate the new equilibrium output and interest rate. [Hint: The LM curve shifts left so you need to re-calculate the dynamic LM curve] plot the trajectory of the economy resulting from

Consider the following dynamic IS-LM model. C(t) = 20+ 0.8% a(t-1) Ya(t) = Y(t) - Tx(t) Tx(t) 5 +0.25Y(t) (iv) = I(t) = 20 – 2r(t) G = 50 (i) What is the equilibrium level of Y and r? (ii) Show that dynamic IS and LM equations are the recursive equations for Y(+1) and r(t+1). That is, this policy change? E (t) = C(t) + 1(t) + G AY(t + 1) = 0.05 [E(t) - Y(t)] Ma(t) = 10+ 0.25Y(t) 0.5r(t) M,(t) = 55 Ar(t+1)=0.8 [Ma(t)- M, (t)] Y(t + 1) = 86a +(1- a)Y(t) + 0.6aY(t-1)-2ar(t) r(t + 1) = -45ß +0.25BY(t) + (1 - 0.5ß) r(t) where a = 0.05 is the speed of good market adjustment and ß = 0.8 is the speed of money market adjustment. [Hint: Substitute all the relationships in each of the adjustment equations in turn. The algebra can be somewhat tedious but not intellectually difficult.] Suppose the Reserve Bank reduces the money supply (Ms) to 53.6 in period 2, given Y and r are at their equilibrium values in periods 0 and 1. (iii) calculate the new equilibrium output and interest rate. [Hint: The LM curve shifts left so you need to re-calculate the dynamic LM curve] plot the trajectory of the economy resulting from

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

(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)?
Please give a detailed solution with an explanation. PLease make sure the graph is visible, clear, and detailed. Make sure to include the new equilibrium coordinate point as well.For the 2 blank answers here are the options:Blank Answer #1:decrease or increase
== 2. Consider an IS/LM model of an economy with the following equations:C = 300+ 0.6Ydl 100 5iG 200TR = 200T 200T = 0.1YL = 0.4Y 30iM/P = 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? (c) Using simultaneous equations calculate the equilibrium level of income and interestrates. Sketch the IS/LM equilibrium position. (d) What are the values of the monetary policy multipliers with respect to income andinterest rates? If the money supply is increased by 30, what are the new market clearing income and interest rate levels?
C. Suppose your neighbor is a physics major who also races motorcycles, and she tells you that horsepower can be expressed in terms of the following equation: H = MDA/S where M=mass, D-distance, A=acceleration and S and H are as defined above. Based on this conversation with your neighbor, you decide to change the functional form of the relationship to include 1/H rather than H as an explanatory variable because that's the appropriate theoretical relationship between the two variables. Estimate the above equation, substituting 1/H for H. Which of the two models do you prefer and why?
E-cigarette users considering quitting E-cig use may wind up taking several tries before successfully stopping: Now, assuming the typical graph for the MB and MC curve, what would happen if (which curve is shifting and as a result what happens to the optimal quantity of smoking?) 1) a new, highly effective smoking cessation aid became available? Describe what would happen in the graph 2) you get the exciting news that you will become a parent
1. Consider the following system of equations. Y₁, Y₂ and Y3 are endogenous variables and X₁, X₂ and X3 are exogenous variables. Y₁ = a₁ + a₂Y₂ + α3Y3 + α4X₁ + α5X₂ + U₁ Y₂ B₁ + B₂Y₁+B3Y3+ B4X2+U2 Y3 = V₁ + V2X1 + Y3X2 +Y4X3 + Uz (Eq. 1) (Eq.2) (Eq.3) a) Determine if each equation is just identified, over identified or unidentified. Consider both rank and order conditions. the outem is
Please give a detailed solution with an explanation. Please make sure the graph is visible, clear, and detailed. Make sure to include the new equilibrium coordinate point as well.
Q25. Given demand and supply for the Cobweb model as follows, find the intertemporal equilibrium price, and determine whether the equilibrium is stable; (i) Qdt = 18-3P Ost = -3 +4Pt-1 (ii) Qdt = 22-3P Qst = -2 + Pt-1
Hello What is the Euler equation used for in this model in equation 7. This is a model from asset pricing. c_t = Consumption U = Utility
1.) Use the line drawing tool to draw the equation Y = 1 + 1.50X. Label your line 'A'. 20- 2.) Use the line drawing tool to draw the equation Y = 18 – 1.50X. Label your line 18- 'B'. 16- 3.) Use the point drawing tool to indicate the point where both equations are equal. Label this point 'Equilibrium'. 14- Carefully follow the instructions above, and only draw the required objects. g 12- 10- 8- 6- 4- 2- 0- 4 6. 8 10 12 14 16 18 20 Quantity (Q) Price P = f(Q) -co
Analysts say that the increase in gasoline prices comes a drop in SUV sales and trade-in values at dealerships.The U.S. Department of energy said that during the past week, U.S. gasoline topped $3 a gallon - the highest level since October 2008. According to Alec Gutierrez,lead analyst for vehicle evaluation at Kelley Blue Book, SUV sales have decreased about 1 percent since the last major gasoline price hike in spring 2008. He doesn't believe that SUV sales will decrease significantly unless prices reach $3.50 to $4 per gallon. if a gasoline price hike of 5 percent caused the SUV sales drop described, what is the cross-price elasticity of demand between gasoline and SUVs?
A stadium can seat 60,000 people. Assume 35% of seats are not occupied (not for sale) because of Covid-19 and social distancing requirements. You are told that the current price of tickets is $70 and that the demand is linear and that the demand function (Qd) = 60,000 - 250P. examine the market for tickets for games at the stadium during these Covid times. You should Illustrate themarket for tickets using a demand and supply diagram. Show all your calculations and properly label the diagram. At $70 a ticket the cap on the number of seats available (because of Covid restrictions) is creating a shortage. How many people miss out on tickets when they are priced at $70 per ticket?