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a) A hypothetical economy is given by the following identities:
C = 3000
I = 2000
G = 2500
T = 0.2Y
MPC = 0.5
X=6500
Z=5500 + 0.2Y
iv. Using initial values, what will the new level of Y be if the tax rate rises to T=0.3Y?
v. Calculate the budget deficit/surplus using the initial values.
vi. Calculate the trade balance using the initial values
a) A hypothetical economy is given by the following identities:
C = 3000
I = 2000
G = 2500
T = 0.2Y
MPC = 0.5
X=6500
Z=5500 + 0.2Y
ii. If investment expenditure decreases by 100, what will be the change in Y?
iii. Using the initial values, if G increases by 300 what will be the new level of Y?
a) A hypothetical economy is given by the following identities:
C = 3000
I = 2000
G = 2500
T = 0.2Y
MPC = 0.5
X=6500
Z=5500 + 0.2Y
i. Find the equilibrium level of income.
a) A simple closed economy with an mpc equal to 0.5. Investment spending has suddenly fallen, reducing aggregate demand and output to a level that is 100 million below Y*.
iii. If the government decided to try to get the economy back to full employment using only an increase in transfers, how large would this increase need to be?
a) A simple closed economy with an mpc equal to 0.5. Investment spending has suddenly fallen, reducing aggregate demand and output to a level that is 100 million below Y*.
i. If the government decide to try to get the economy back to full employment using only an increase in government spending, by how much would G need to be increased?
ii. If the government, instead, decided to try to get the economy to full employment using only a lump-sum tax cut how big of a tax cut would be needed?
a) A simple closed economy, with an mpc equal to 0.75. The government has passed a balanced budget amendment. The economy goes into a recession, so the government increases government spending by 40 million to try to expand the economy
i. What is the net effect on output from these two policies? Was there any expansionary effect?
a) A simple closed economy, with an mpc equal to 0.75. The government has passed a balanced budget amendment. The economy goes into a recession, so the government increases government spending by 40 million to try to expand the economy
i. Find the change in output from the increase in government spending.
ii. The balanced budget amendment requires the government to also raise taxes by 40 million. Calculate the change in output from the tax hike.
a) A simple closed economy, with an mpc equal to 0.75. The government has passed a balanced budget amendment. The economy goes into a recession, so the government increases government spending by 40 million to try to expand the economy
i. Find the change in output from the increase in government spending.
Analysis the performance of Ghana's industrial sector and its sub-sectors in terms of the contributions towards gross domestic product (GDP) and total employment.
Explain the THREE instruments of monetary policy. With the use of appropriate economic models, explain and illustrate how the Central Bank can achieve an increase in real GDP with the use of three of the monetary policy instruments you discussed.
