Intermediate Macroeconomic Theory

at
Categories
Tags

Suppose that people hold no currency, the ratio of reserves to deposits is 0.1, and that the demand for money is given by the following: Md = Y (.8 − 4i) where Y is income and i is the interest rate. Initially, the monetary base is $100 billion and nominal income is $5 trillion.

1. What is the demand for central bank money?

2. Find the equilibrium interest rate by setting the demand for central bank money equal to the supply of central bank money.

3. What is the overall supply of money? Is it equal to the overall demand for money at the interest rate you found in part b?

4. What is the impact on the interest rate if central bank money is increased to $300 billion?

5. If the overall money supply increases to $3,000 billion, what will be the impact on i?

2 IS-LM Consider the following IS-LM model: C = 200 + .25YD I = 150 + .25Y − 1000i G = 250 T = 200 Md P = 2Y − 8000i M P = 1600 Where all variables (C, Y , M, etc.) are real. 1

1. Derive the IS relation (Hint: You’ll want to solve for Y ).

2. Derive the LM relation (Hint: You’ll want to solve for i).

3. Solve for equilibrium real output.

4. Solve for the equilibrium interest rate.

5. Sove for the equilibrium values of C and I, and verify the value you obtained for Y by adding up C, I, and G.

6. Now suppose that the money supply increases M/P = 1, 840. Solve for Y , i, C, and I, and describe in words the effects of an expansionary monetary policy.

7. Set M/P equal to its initial value of 1, 600. Now suppose that government spending incrteases to G = 400. Summarize the effects of an expansionary fiscal policy on Y , i, and C. 3 IS-LM and Central Bank Money Consider the following IS-LM model with a banking system: Consumption: C = 7 + 0.6YD Investment: I = 0.205Y − i Government expenditure: G = 10 Taxes: T = 10 Money demand: Md P = Y i Demand for reserves: R d = 0.375Dd Demand for deposits: Dd = (1 − 0.2)Md 2 Econ 320 – HW 2 Demand for currency

CUd = 0.2Md This says that consumers hold 20% (c = 0.2) of their money as currency and the required reserve ratio is 37.5% (θ = 0.375). Demand for central bank money (Hd ) is the total amount of currency being demanded plus the total demand for reserves. Suppose the price level is P = 1 and that the initial supply of central bank money is $100.

1. Solve for the money multiplier. Explain your work.

2. Solve for equilibrium output and the equilibrium interest rate at the initial supply of central bank money (ie. $100).

3. Suppose that the central bank sells $80 worth of bonds using open market operations. Solve for the new equilibrium output.

4. Solve for the the new equilibrium interest rate after the open market operations and use an IS-LM graph to explain what happened.

Sample Solution

ands fixed between monocortical screws put onto the break parts

Vikas and Terrence Lowe in 2009 in their specialized note on Modification of the versatile inside footing technique for impermanent between part decrease before inner obsession portrayed a basic and successful change of the Elastic Internal Traction strategy as recently depicted by Scafati et al.The adjustment uses 2 mm AO mono-cortical screws and elastomeric orthodontic chain (EOC) rather than flexible groups. 9–12mm length mono-cortical screws deliberately put to a profundity of 4–5 mm roughly 7 mm either side of the crack.

In light of concentrates by Smith at el in 1933 a progression of 10 x 1 cm ‘turns’ of the versatile should oppose an uprooting power of between 30.- 40 Newtons roughly.

Degala and Gupta, (2010) utilized tantamount systems for symphyseal, parasymphyseal and body cracks. Titanium screws with 2 mm width and 8 mm length were fixed a good ways off of 10-20 mm from the line of crack, and around 2 mm screw length stayed over the issue that remains to be worked out a 24 G wire circle. Notwithstanding, before applying this system, they utilized IMF.

Rogers and Sargent in 2000 altered A standard towel by twisting two parts of the bargains roughly 10 degrees outward and was done to keep withdrawal from the bone. Kallela et al. in 1996 changed a standard AO decrease forceps through shortening the teeth and made scores at the finishes to get a handle on firmly in the drill openings. Shinohara et al. in 2006 utilized two adjusted decrease forceps: one was situated at the second rate outskirt and the other in the unbiased subapical zone.

Choi et al. in 2005 included two treatment gatherings (decrease forceps and IMF gathering) and utilized a size of 1 to 3 to evaluate the precision of anatomic decrease in the radiographic picture. A score of 1 showed an inadequately decreased crack which required a subsequent activity, while a score of 2 demonstrated a slight uprooting however a worthy impediment. A score of 3 showed an exact decrease. The decrease forceps bunch had a higher number of precise anatomic arrangements of the breaks than the IMF gathering.

New decrease forceps were created by Choi et al., 2001; Choi et al., 2005 for mandibular point cracks dependent on the one of a kind life structures of the sideways line and body; one finish of the forceps intended for situating in the section average to the angled line, and another end was set in the distal piece beneath the slanted line . The decrease pressure forc

This question has been answered.

Get Answer
WeCreativez WhatsApp Support
Our customer support team is here to answer your questions. Ask us anything!
👋 Hi, Welcome to Compliant Papers.
Hi, how can I help?