Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Need help answering question number 3 and 4. The data needed are from the other screenshots I included. Also for change in Y and change

image text in transcribedimage text in transcribed

Need help answering question number 3 and 4. The data needed are from the other screenshots I included. Also for change in Y and change in interest rate, the change in Y is a decrease of 95.675 billion dollars and the change in interest rate is a decrease of 1.3823. Other relevant data are all included in the pictures below.

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
3. In the model, we are going to assume that the decrease in RGDP comes from a reduction in co and g. Intuitively, rms and consumers decreased their purchases due to the lockdown. From the solution of the model (the equation for output), compute the change in output when only on, be and 2' change. Finally, using that expression solve for AGO + Abe when AY is the value found in the rst point of this section and Ai the value in the second one. 4. Using your answer for Part1 Q4, provide a numeric answer for the following question. How much does Government Expenditures have to increase in order to make output recover from the crisis? Hint: You need to nd have a positive AG in order to have AY = 0 when co, bu and 'i change according to the previous questions. . Solve for the equilibrium GDP. . Solve for Consumption, Investment, Taxes, Government Expenditures, Net Exports and interest rate. . How much does GDP fall if autonomous consumption and investment fall at the same time (A00, Abe

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Theory And Practice Of Public Sector Reform

Authors: Steven Van De Walle, Sandra Groeneveld

1st Edition

1317500113, 9781317500117

More Books

Students also viewed these Economics questions

Question

Students graphed their completion of homework on a class report.

Answered: 1 week ago