Calculating GDP

1. Suppose nominal GDP is $100,000,000,000 in 1983. The GDP is implicit price deflator for 1983 is 200. The base year of GDP deflator in 1972. a. Calculate real GDP in 1983. b. In terms of value of dollar, what year is real GDP measured? c. What happened to value of dollar from 1972 to 1983? d. What has happened to ge ...continues

Tax Increase

1. For each of the following, indicate how an INCREASE in government taxes changes them. YD (Disposable Income) C (C(Yd) Consumption of function of disposable _ income and includes an autonomous Component, C) Y* (equilibrium, product market real GNP)

Money Supply and Goverment expendiature

I am attaching the problem in word document.You can solve the problem in that document.

Demand and Supply

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Government subsidy for investments

3. When the government subsidizes investment, such as with an investment tax credit, the subsidy often applies to only some types of investment. This question asks you to consider the effect of such a change. Suppose there are two types of investment in the economy: business investment and residential investment. And suppose ...continues

Keynesian Cross

5. In the Keynesian cross, assume that the consumption function is given by C = 200 + .9 (Y-T). Planned investment is100; government purchases and taxes are both 100. a. Graph planned expenditure as a function of income. b. What is the equilibrium level of income? c. If government purchases increase to 125, what is th ...continues

Cobb Douglas

4. Consider an economy with the following Cobb-Douglas production function: Y = K1/3 L2/3. The economy has 1,000 units of capital and a labor force of 1,000 workers. a. What is the equation describing the demand for labor in this economy? (Hint: Review the appendix to Chapter 3.) b. If the real wage can adjust to equi ...continues

Fiscal Policy and Monetary Policy

Choose the Letter or Combination of Letter for those 4 questions A.Investment DOES NOT depend upon the real rate of interest. B.Investment DOES depend upon the real rate of interest. C.The demand for money DOES depend upon the real rate of interest. D.Money Wages are flexible. E.Money Wages are DOWANDRDLY RIGID. F.There ...continues

Aggregate exp, income,spending,taxes,multiplier,income and output.

2. A recent poll shows that 46% of Canadians are wary of retirement savings (The Globe and Mail, February 12,2003). Use the appropriate diagrams to answer the following questions. (20 marks) (a) If Canadians decide to save more out of any increase in disposable income for future consumption, how would this affect aggregate e ...continues

Aggregate Expenditure

5. Suppose AE = 1600 + 0.75Y. (20 marks) (a)Draw the aggregate expenditure curve. (b) What are the slope and the vertical axis intercept of the curve? (c) What is the multiplier? (d) What is the effect of $100 cut in autonomous consumption on equilibrium income? Demonstrate your answer graphically. see attachment ...continues