ECON 104_HomeWork04_2019_edited.pdf

ECON 104_HomeWork04_2019_edited.pdf - Question 1 3 3 pts...

This preview shows page 1 - 3 out of 12 pages.

Question 1 3 / 3 pts Part 1: AE Problem (11 questions worth 3 points each for a total of 33 points). FOR FILL-IN-THE-BLANK questions: If your answer is in decimal form, round to 2 decimal places. For example, if your answer is .412, enter it into the fill-in-the-blank as .41, or if your answer is 1.415, enter it into the fill-in-the-blank as 1.42. If there are no decimals in your answer, you will simply enter the number; so if your answer is 2, enter 2 with no decimals. Do not enter any extra spaces, do not enter commas or $ or % symbols. 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 font . 1) C = a 0 + a 1 (Y-T) + a 2 (WSM) + a 3 (WRE) + a 4 (CC) + a 5 (r) 1’) C = a 0 + a 1 (Y-200) + a 2 (10,000) + a 3 (15,000) + a 4 (120) + a 5 (3) 1’') C = a 0 + a 1 (Y-200) + a 2 (12,000) + a 3 (15,000) + a 4 (160) + a 5 (3) 2) I = b 0 + b 1 AS + b 2 CF + b 3 (r) 2’) I = b 0 + b 1 (140) + b 2 (1500) + b 3 (3) 2’) I = b 0 + b 1 (180) + b 2 (2000) + b 3 (3) 3) G = G 3’) G = 200 4) X-M = X-M 4’) X-M = -200 4’) X-M = -400 5) AE = C + I + G + X-M Where: a 0 = 50, a 1 = .80, a 2 = .05, a 3 = .10, a 4 = .5, a 5 = -400, b 0 = 100, b 1 = .5, b 2 = .2, b 3 = -50 Use 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 Answer 1: 750 Answer 2: .80 Question 2 3 / 3 pts What is the value of Investment: I = _320_______
Image of page 1

Subscribe to view the full document.

Question 3 3 / 3 pts Fill in the intercept and slope values to correctly complete the AE equation: AE = + Y Answer 1: 1070 Answer 2: .80 Question 4 3 / 3 pts The value of equilibrium output (Y) = 5350 Incorrect Question 5 0 / 3 pts The value of equilibrium consumption (C) = __Got wrong____ Question 6 3 / 3 pts We now incur shocks to the economy as provided above in the red font . Use these new conditions to get expressions for the Consumption function, Investment and the AE equation. Fill in the intercept and slope values to correctly complete the new consumption function: C = + Y Answer 1: 870 Answer 2: .80 Question 7 3 / 3 pts What is the new value of Investment: I = 440 Question 8 3 / 3 pts Fill in the intercept and slope values to correctly complete the new AE equation: AE = + Y Answer 1: 1110 Answer 2: .80 Question 9 3 / 3 pts The new value of equilibrium output (Y) = 5550 Incorrect Question 10
Image of page 2
0 / 3 pts The new value of equilibrium consumption (C) = Got wrong 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. Question 11 3 / 3 pts 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. 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.
Image of page 3
You've reached the end of this preview.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern