Spring17 Econ104 HW4 - Points Awarded 96.00 Points Missed Percentage 4.00 96.0 1 Part 1 AE Problem(11 questions worth 3 points each for a total of 33

Spring17 Econ104 HW4 - Points Awarded 96.00 Points Missed...

This preview shows page 1 - 5 out of 21 pages.

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 Table for Individual Question Feedback Points Earned: 3.0/3.0 2.What is the value of Investment: I = 390.60 270
Table for Individual Question Feedback Points Earned: 3.0/3.0 3.Fill in the intercept and slope values to correctly complete the AE 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 5.The value of equilibrium consumption (C) = Table for Individual Question Feedback 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 = Table for Individual Question Feedback 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
10.The newvalue of equilibrium consumption (C) = Feedback: NOTE: There is no graphing component to be collected for this homework. However, you should be comfortable creating two separate graphs from the above questions in part 1. You should be able to: 1. Graph the consumption function both before and after the shock on one graph, and also plot equilibrium consumption and output values both before and after the shock. 2. Graph the AE equation both before and after the shock on one graph, and also plot equilibrium output Y both before and after the shock. Table for Individual Question Feedback Points Earned: 3.0/3.0

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture