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PLEASE HELP !!! Question 3. (20 points) In modem economy, fiscal policy has become an effective instrument by which governments could influenoe macroccobomic variables. For

PLEASE HELP !!! image text in transcribed
Question 3. (20 points) In modem economy, fiscal policy has become an effective instrument by which governments could influenoe macroccobomic variables. For example, policy-makers could adjust aggregate ceonoctic activities by changing the levels of taxation (revenoe) and spending (expenditure). Use a closed econonty (no international trade) as the model, finish the following questons. (1) The table following shows you some macrocconomic indicators of the US in 2021 National aeenante of the Lleited States in 2021 At aggregate level, demand for national income ( ) of a closed economy, can be modeled as, Y=C(YT+1+G. Here total consumption (C) is a function of MPC and disposable income as CMPC(YT). Based on the information above, how much is total investment ( (h) of the United States in 2021. What is percentage (\%) of investment of GDP in 2021? Note: In a closed ccononiy, we do not consider intemational trade or net export (NX). (2) In 2020, to counter the economic fallout of the COVID-19 pandemic, tho US governmem took several conoomie simulus measures. For example, the $22 trillion Coronavirus Aid, Relief, and Feononse Security Act (CARES Act) was passed in March 2020. After cconomic stimulus Tackages, total federal spesding spiked to 56.6 triltion in 2020 . How real interest rate (f) is decmmined in a closed economy? How the increase of federal spendeng would affeet fotal national savings (S), real interest ratc, and investment? Based on information givel, use a proper supply-demand diagram to depist the change of real interest rate of the US in 2020 . Note. Here we still assume we are in a closed economy. Question 3. (20 points) In modem economy, fiscal policy has become an effective instrument by which governments could influenoe macroccobomic variables. For example, policy-makers could adjust aggregate ceonoctic activities by changing the levels of taxation (revenoe) and spending (expenditure). Use a closed econonty (no international trade) as the model, finish the following questons. (1) The table following shows you some macrocconomic indicators of the US in 2021 National aeenante of the Lleited States in 2021 At aggregate level, demand for national income ( ) of a closed economy, can be modeled as, Y=C(YT+1+G. Here total consumption (C) is a function of MPC and disposable income as CMPC(YT). Based on the information above, how much is total investment ( (h) of the United States in 2021. What is percentage (\%) of investment of GDP in 2021? Note: In a closed ccononiy, we do not consider intemational trade or net export (NX). (2) In 2020, to counter the economic fallout of the COVID-19 pandemic, tho US governmem took several conoomie simulus measures. For example, the $22 trillion Coronavirus Aid, Relief, and Feononse Security Act (CARES Act) was passed in March 2020. After cconomic stimulus Tackages, total federal spesding spiked to 56.6 triltion in 2020 . How real interest rate (f) is decmmined in a closed economy? How the increase of federal spendeng would affeet fotal national savings (S), real interest ratc, and investment? Based on information givel, use a proper supply-demand diagram to depist the change of real interest rate of the US in 2020 . Note. Here we still assume we are in a closed economy

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