Consider the following economy:
Labor supply: Nt= 90
Capital stock: Kt = 90
Government spending: Gt = 20
Tax collections: Tt = 20
Production function: Yt = 2(Kt)0.5 (Nt)0.5
Real money demand Lt = 2Yt – 200rt
Consumption function: Ct = 16 + 0.8(Yd)t
Domestic price level: Pt = 4
Investment function: It = 25 – 50rt
Nominal money supply: Mt = 1296
QUESTIONS:
1. (7 points) Find an expression for the IS curve.
2. (7 points) Find an expression for the LM curve.
3. (7 points) Find an expression for the aggregate demand curve.
4. (7 points) What are the short run equilibrium values for output, interest rate and price level?
5. (7 points) Plot (a)-(d) on the IS-LM and AD-SRAS-LRAS diagrams. Make sure to label (i) the axes, (ii) the curves and (iii) the initial equilibrium
levels.
6. (7 points) Is this a short-run level of output also a long-run equilibrium? Explain.
7. (7 points). Suppose that the government decreases taxes to T=10. Find the new short-run equilibrium levels of output and interest rate
8. (7 points) Find the long-run equilibrium levels of output, interest rates and prices.
9. (7 points) Graph this combination of policies both in the short and in the long run.
10. (7 points) Explain how the adjustment from the short-run to the long-run occurs.
Plato guarantees that there is a reality outside of that. For example, when discussing mountain men, there is a person or thing outside the cavern that helps venture those shadows. There is constantly a wellspring of light for instance the sun which demonstrated the light, an entire world exists outside of the cavern however since the cave dweller is centered around the shadows they don’t see that. To the stone age man the shadows are a reality so anything that isn’t a shadow isn’t genuine. Plato contends that it doesn’t make a difference how precisely our faculties can identify the shadows the contention is that there is a reality outside of what our faculties can see. The first way of thinking contention, from Plato 2500 years back, didn’t question sense impressions all things considered: The cavern similarity expect that the sense impressions of the mountain man precisely mirrored the shadow play on the cavern divider. Numerous rationalists including Plato contend that there is a whole world outside of what an ordinary human sees. In basic words, the response to the inquiry is that you could generally be missing something.
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Dispassionate authenticity, the hypothesis of reality which was created by Plato. It expresses that the unmistakable universe of things is a presentation, like shadows on the divider. While the unmistakable universe of points of interest is incredible, the Theory of Forms involve the imperceptible yet obvious reality and are genuine. Plato thought about that the brain is the one thing that can get to the ageless truth of facts, the domain of the Forms throwing the unmistakable world. The acclaimed purposeful anecdote of the cavern, Plato recommends that people just realize this present reality as shadows of the genuine articles they see associating on a divider.
Plato’s character Socrates recommends that information isn’t discernment in such a case that “seeing” is comparable to “knowing,” at that point when one doesn’t see a thing, he never again has the information on what he sees. Observation on this view can be characterized as a moment “marvel” in which sense organs participate in cooperations with outer articles through the demonstration of seeing. Outer items animate real faculties through such collaboration from which a kind of observation – shading, taste, smell, or contact – is experienced. At the point when the demonstration of seeing stops to happen, Plato guarantees that on the view that information is discernment, we never again access the information on the apparent articles.
Taking everything into account, Plato sees discernment and conceptualization of observation as discrete ideas. He unequivocally recognizes the hole between the exact instant of discernment and the resulting procedure of observation in which tactile improvements are associated with tangible classes. What’s more, creatures that are unequipped for thinking are likewise brought into the world with detectable quality simply like a man. On the off chance that a man and a creature were to have a similar ability to see in their newborn child organize, discernment can be characterized as something without thinking. Along these lines Plato’s perspective on discernment is at last non-conceptualist – one that thinks about observation as negligible tactile consciousness of outer improvements in illustrative substance without ensuing conceptualization of the sensation. As per Plato, observation and conceptualization of recognition are two separate ideas living in various domains, constrained by various elements.
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