ss01 - University of Toronto Economics Department...

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C=100 + 0.8Y 1200 Y 100 1060 C=100 + 0.8Y 100 1000 Z=200 + 0.8Y Z=Y University of Toronto Macroeconomics, Theory and policy Masoud Anjomshoa Economics Department Solution set #1 Disclaimer: The following answers are only suggested solutions, and may NOT include a complete solution for the questions and problems in your homework, as you must present in your assignments and/or exams. In your solutions you must show your work, and demonstrate your line of thinking clearly. Please, always check my calculations for unintentional typos or miscalculations. --------------------------------------------------------------------------------------------------------------------------------- 1- a)- See the graph. b)- C=100 + 0.8Y Y=1200 C=1060, Y=1200 c)- Z= G + C Z =100 + 100 +0.8*Y Z=200 + 0.8 Y d)- Line Z = Y has a slope of 45 degree. Z=200 + 0.8 Y Z= Y Y=200 + 0.8 Y Y= Z=1000 G Z C C Y=1200 1000 Y G=100

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C=100 + 0.8Y G Z 100 1500 Z=300 + 0.8Y Z=Y 300 200 M=10 - R R 10 10 Z= G + C Z =200 + 100 +0.8*Y Z=300 + 0.8 Y Z=300 + 0.8 Y Z= Y Y=300 + 0.8 Y Y= Z=1500 ---------------------------------------------------------------------------------------------------------------------------- 2- a)- Y= 5 M = 10 - R b)- M = 10 - R M= 5 5 = 10 – R M= 5, R=5 Y G=200 M=5 M 5 5 1500
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ss01 - University of Toronto Economics Department...

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