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- Given the model for the Mary Island economy calculate the equilibrium level of income. Show your work. C = 100 + .7Yd G = 700 T = 500 I = 200The economy of Godzillaland is represented by the following:C=50+0.25Y d , T=1000, G=1000, I=100 (a) Calculate the equilibrium level of output. Graph your solution. (b) If the government spending increases by 50 what is the new equilibrium level of output? Use the government spending multiplier. (c) If the government increases taxes by 50 what is the new equilibrium level of output? Use the tax multiplier. (d) If the government increases taxes and spending by 50 what is the new equilibrium level of output? (e) Calculate the equilibrium level of output in case where taxes depend on income according to the following: T=-25+0.125Y.Consider the economy of Hicksonia.a. C=300+0.50(Y-T)The investment function is I=100-20tGovernment purchases and taxes are both 150.For this economy, use a graph to illustratethe IS curve for r ranging from 0 to 8. (4marks)
- Suppose the following equations for an economy:C=100+0.8YD I=50-25i G = T = 50 M/P=200 Md=Y-25iIn equilibrium:a. Y=200.b. Y=300.c. Y=400.d. Y=500.e. none of these. Explain..5. Find the equilibrium output for the following economy C = 120 + 0.5(Y – T); I = 250 – 10r; G = 50; 400; P= 2; T = 40; ()d = 1000 – 200r; M =. Suppose the United States economy is repre- sented by the following equations: Z = C + I + G, C = 500 + 0.75YD, T = 600, I = 300, YD = Y − T , G = 2000 Given the above variables, calculate the equilibrium level of output. assume that government spending decreases from 2000 to 1900. What is the new equilibrium level of output? How much does income change as a result of this event? What is the multiplier for this economy?
- You are an economic advisor to the government. Discuss your opinion . a) How COVID-19 pandemic will affect the consumption behavior as well as the investment done by the firms and household for the next two years? b) What are the actions or policies that the government can implement to face this situation? please answers with analysis and --graph (if possible)Early during the COVID-19 pandemic, the government used multiple stimulus packages to increase government spending. 3. Using the Z-Y, NX-Y, IS-LM, UIP combined graph on the next page, what should be happening as a result? Show the shifts on the graph itself. NN Z Z NN Y=Z Z c0- if f UI i pvt L M c1T+I+G+NX i10 y 45° if f if NK N Y Y f 0 Y X Y 0 Y 0 Y 20 NX N X E 0 E Y NX Fiscal stimulusYou are given the following information about a closed economy with no government:Consumption = 445 + 0.75Y Investment = 250 Calculate the equilibrium level of income.
- 25 1 Calculate the equilibrium level of investment if you have the following equations: C=0.4Yd+20, national income is 1000, government expenditures is 200, tax is 50 Investment =300 O Investment-D350 O Investment3D400 O Investment3D450 O None of the above OConsider an economy that uses exclusively labor and capital to produce.Suddenly, the government of the economy plans to permanently increase the level ofgovernment purchases. Please use words and figures to illustrate your answers.(1) Suppose the economy is a closed one. How does the long-run GDP of the economychange because of the increased government purchases? (2) Will your answer to (1) be changed if the economy is an open one? Explain youranswers briefly.(3) Suppose the economy is a closed one. Will the increased government purchaseschange the equilibrium interest rate?Consider an economy that is characterized by the following equations C= 400 + 0 5 Vd I = 700 - 40001 + 0.1V G= 200 T= 200 (MP)d = 0.75Y - 75001 (M/P)' = 600 What is the equilibrium output/ income (X)?