Business, 20.01.2020 17:31 nacgrading3p6d8pf

Consider the following numerical example of the is-lm model:

c = 200 + 0.25yd

i = 150 + 0.25y - 1000i

g = 250

t = 200

i = 0.05 (the i has a bar over it)

a. derive the is relation. (hint: you want an equation with y on the left side and everything else on the right.)

b. the central bank sets an interest rate of 5%. how is that decision represented in the equations?

c. waht is the level of real money supply when the interest rate is 5%? use the expression (m/p) = 2y - 8000i

d. solve for the equilibrium values of c and i, and verify the value you obtained for y by adding c, i, and g.

e. now suppose that the central bank cuts the interest rate to 3%. how does this change the lm curve? solve for y, i, and c, and describe in words the effects of an expansionary monetary policy. what is the new equilibrium value of m/p supply?

f. return to the initial situartion in which the interest rate set by the central bank is 5%. now suppose that government spending increases to g = 400. summarize the effects of an expansionary fiscal policy on y, i, and c. what is the effect of the expansionary fiscal policy on the real money supply?

Answers: 2

Show answers

Another question on Business

Business, 21.06.2019 19:20

In 2007, americans smoked 19.2 billion packs of cigarettes. they paid an average retail price of $4.50 per pack. a. given that the elasticity of supply is 0.50.5 and the elasticity of demand is negative 0.4−0.4, derive linear demand and supply curves for cigarettes. the demand equation is qdequals=nothingplus+nothing times ×p and the supply equation is qsequals=nothingplus+nothing times ×p.

Answers: 2

Answer

Business, 22.06.2019 15:10

Popeye produces 20 cans of spinach in 8 hours. wimpy produces 15 hamburgers in 10 hours. if each hamburger trades for 1.5 cans of spinach, then: a.wimpy’s production and productivity are greater than popeye’s. b.popeye’s production is greater than wimpy’s, but his productivity is less. c.wimpy’s production is greater than popeye’s, but his productivity is less. d.popeye’s production and productivity are greater than wimpy’s.

Answers: 3

Answer

Business, 22.06.2019 19:50

Aproduction line has three machines a, b, and c, with reliabilities of .96, .86, and .85, respectively. the machines are arranged so that if one breaks down, the others must shut down. engineers are weighing two alternative designs for increasing the line’s reliability. plan 1 involves adding an identical backup line, and plan 2 involves providing a backup for each machine. in either case, three machines (a, b, and c) would be used with reliabilities equal to the original three. a. compute overall system reliability under plan 1. (round your intermediate calculations and final answer to 4 decimal places.) reliability b. compute overall system reliability under plan 2. (round your intermediate calculations and final answer to 4 decimal places.) reliability c. which plan will provide the higher reliability? plan2plan1

Answers: 3

Answer

Business, 22.06.2019 21:20

In a market economy, supply and demand are important because theya. (i) play a critical role in the allocation of the economy's scarce resources.b. (ii) determine how much of each good gets produced.c. (iii) can be used to predict the impact on the economy of various events and policies.d. all of (i), (ii), and (iii) are correct.

Answers: 3

Answer

You know the right answer?

Consider the following numerical example of the is-lm model:

c = 200 + 0.25yd

Questions