Points Awarded
96.00
Points Missed
4.00
Percentage
96.0%
1.Part 1: AE Problem (11 questions worth 3 points each for a total of 33 points). Suppose the initial conditions of the economy are characterized by the following equations in black font. We then shock the economy as shown in the red font1) C = a0+ a1(Y-T) + a2(WSM) + a3(WRE) + a4(CC) + a5(r) 1’) C = a0+ a1(Y-200) + a2(10,000) + a3 (15,000) + a4(120) + a5(4)1’') C = a0+ a1(Y-200) + a2(12,000) + a3(15,000) + a4(160) + a5(4)2) I = b0+ b1AS + b2CF + b3(r) 2’) I = b0+ b1(140) + b2(1500) + b3(4)2’) I = b0+ b1(180) + b2(2000) + b3(4)3) G = G3’) G = 2004) X-M = X-M4’) X-M = -2004’) X-M = -4005) AE = C + I + G + X-MWhere: a0= 50, a1= .60, a2= .05, a3= .10, a4= .5, a5= -400, b0= 100, b1= .5, b2= .2, b3= -50Use the initial conditions above to get expressions for the Consumption function, Investment and the AE equation.Fill in the intercept and slope values to correctly complete the consumption function:C = +
.
Y
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Points Earned:
3.0/3.0
2.What is the value of Investment: I =
390.60
270

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Points Earned:
3.0/3.0
3.Fill in the intercept and slope values to correctly complete the AE equation: AE =
Y
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Points Earned:
3.0/3.0
Table for Individual Question Feedback
Points Earned:
3.0/3.0
5.The value of equilibrium consumption (C) =
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Points Earned:
3.0/3.0
6.We now incur shocks to the economy as provided in the red font. Use these new conditions to get expressions for the Consumption function, Investment and the AE equation.
1380

Fill in the intercept and slope values to correctly complete the
new
consumption function: C =
+
Y
Table for Individual Question Feedback
Points Earned:
3.0/3.0
Correct Answer(s):
Box 1: 510;
Box 2: .6, .60, 0.6, 0.60
7.
What is the
new
value of Investment: I =
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Points Earned:
0.0/3.0
8.Fill in the intercept and slope values to correctly complete the newAE equation: AE =
Y
Table for Individual Question Feedback
Points Earned:
3.0/3.0
Table for Individual Question Feedback
Points Earned:
3.0/3.0
510
.60
190