CAS EC 102 Lecture 1: Module 2

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silverprairie-dog782

5 Oct 2018

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Are taken out and transferable payments(tr) are added. Total current income (gdp) after taxes (t) When (cid:3005) goes up, c goes up. When r goes up, c goes down. Costs more to borrow, incentive to save. Household wealth = household assets - household liabilities. Household assets - value of a home, car, financial invest,ents. Household liabilities - credit card debt, balance due on mortgage. When wealth goes up, c goes up. When wealth goes down, c goes down. When p goes up, wealth goes down and c goes down. When p goes down, wealth goes up and c goes up. Consumption function and marginal propensity to consume (mpc) - relationship between consumption spending and disposable income. Mpc - slope of the function (cid:3030) (cid:3028)(cid:3041)(cid:3034)(cid:3032) (cid:3041) (cid:3031)(cid:3046)(cid:3043)(cid:3042)(cid:3046)(cid:3028)(cid:3029)(cid:3039)(cid:3032) (cid:3041)(cid:3030)(cid:3042)(cid:3040)(cid:3032) = (cid:3004) (cid:3030) (cid:3028)(cid:3041)(cid:3034)(cid:3032) (cid:3041) (cid:3030)(cid:3042)(cid:3041)(cid:3046)(cid:3048)(cid:3040)(cid:3043)(cid:3047)(cid:3042)(cid:3041) Y = c + i + g + nc. Does not include (none of these add to gdp) About 77% of all investment in 2016.

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Table:

Variable 2009 2010
_____________________________________
National Savings 135 150
Tax Revenue/GDP 0.3 0.3
Net Factor Payments 75 40
Budget Deficit 10 30
GNP 675 840
Transfer Payments 30 35
Current Account Balance -50 25
Interest Payments 20 -10

Here is the table I was given.
The question asked is to find the private savings rate for both years.

I am struggling with: finding the GDP and consumption. I know that private savings = (T + NFP - T + TR +INT) - C, but I don't know how to find the rate. What is the difference?

raspberryfrog925

1. Assume an economy with a Household Sector and a Business Sector. Household spending is given by C= 400 + 0.9Qd. Since there is no public sector, Qd = Q. Business sector spending is given as I = 1300. Determine the level of Autonomous Spending, the Spending Multiplier, GDP (Q), Consumption Spending (C) and Household Savings.

2. Now add a Foreign Sector where Exports are X = 1000 and Imports are Im = 500 + 0.1Q. Determine the level of Autonomous Spending, the Spending Multiplier, GDP (Q), Imports, Net Exports, Consumption Spending (C) and Household Savings.

3. Now add a public sector where Government Purchases are G = 2000, Transfer Payments are Tr = 2500 and Taxes are Tx = 500 + (1/3)Q. With the public sector Disposable Income is Qd = Q - Tx + Tr. Determine the level of Autonomous Spending, the Spending Multiplier, GDP (Q), Imports, Net Exports, Taxes, Disposable Income, Consumption Spending (C), Household Savings and the Deficit.

Please explain what each equation represents in the answer.

sangriamammoth898

What are the short-run equilibrium values of Y and r when P = 3?

Consumption: C = 310 + 0.6(Y - T) - 100r
Investment: I = 150 - 350r
Net Exports: NX = - 0.1Y - 50r + 0.1YFor + 1000rFor
Government purchases: G = 365
Taxes: T = 275
Foreign real income: Y For = 1200
Foreign real interest rate: rFor = 0.01
Nominal money supply: M = 4800
Real money demand: L = 1000 + 0.4Y - 400r

a.	Y = 1570 and r = 0.025

b.	Y = 1555 and r = 0.03

c.	Y = 1540 and r = 0.04

d.	Y = 1525 and r = 0.05

copperhare868

CAS EC 102 Lecture 1: Module 2

CAS EC 102 Full Course Notes

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