Exam (elaborations)
ECON 104 HOMEWORK 1 QUESTION AND ANSWERS ( GRADED A+ )
- Course
- Institution
ECON 104 HOMEWORK 1 QUESTION AND ANSWERS
[Show more]
Seller
Follow
abram23
Reviews received
Content preview
Question 1 ptsQuestion 2 pts
Question 3 ptsECON 104 HOMEWORK 1 QUESTION AND ANSWERS Part 1: 20 questions worth 3 points each for a total of 60 points.
Suppose the consumption function is: C = a1 Yd + a2 WRE/S + a3CC Where all the a’s (the sensitivity parameters) are greater than zero. Initial conditions:
Let a1 = 0.60, a2 = 0.04, a3 = 0.5, WRE/S = 18,000: CC = 90 Solve for C in
terms of Yd. Select the correct equation. None of these are correct
C = 720 + .60 Yd
C = 765 + .60 Yd
C = 765 + .64 Yd
C = 90 + .60 Yd
Use the equation you found in #1 and let Yd = 2000. C is equal to:
Suppose that the stock market rallies so that WRE/S increases to 22,000.
Additionally, consumer confidence (CC) rises to 100. Re-solve for C in terms of Yd. Select the correct equation.
None of these are correct Question 4 pts
Question 5 pts
Question 6 ptsC = 930 + .60 Yd
C = 720 + .65 Yd
C = 765 + .64 Yd
C = 880 + .60 Yd
Now suppose disposable income (Yd) falls due to a tax increase (Uncle Sam is trying to balance the budget) to 1800. Solve for the level of consumption
using the equation you found in question #3. Consumption (C) is equal to:
Now we will calculate the level of consumption that would have occurred if
Uncle Sam did not raise taxes. In other words, use the equation you found in question 3, but keep Yd at its original value of 2000. Consumption (C) is equal to:
Look at the consumption values you calculated in #2 and #4. The percent
change in consumption between those values is: %
NOTE: There is no graphing component to be collected for this homework. However, you should be comfortable graphing the equations you found in #1
and #3. You should also be able to plot the points you found in #2, #4 and #5.
NOTE: There is no graphing component to be collected for this homework. However, you should be comfortable graphing the equations you found in #1 and #3. You should also be able to plot the points you found in #2, #4 and #5.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller abram23. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R264,31. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
59325 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now