Solution-Real side of an economy, Suppose the real side of

Real side of an economy

Assignment Help Business Economics

Reference no: EM13151375

3) Suppose the real side of an economy is characterized by:
Y = 80K1/2 L1/2 K=100 and L= 100
G = 3000 T = 3000
I = 2000 - 6000r C = 600 + .6(Y-T)
And suppose the nominal side of this economy is characterized by:
Real money demand: (M/P)d
= 0.2Y - 1000r
Nominal money supply: M = 3000
Where P is aggregate price level, and M is nominal stock of money.

a) Compute the following: Real GDP (Y), real interest rate (r ), real wage rate (W/P, in units of
goods), aggregate price level (P), and a nominal wage rate (W, in terms of money).
b) Suppose that the government raises the money supply 10% from 3000 to 3300. Report the
new values for each of the variables in part (a) above. Does the Classical Dichotomy hold in
this economy? Explain.

Reference no: EM13151375

Questions Cloud

What was the percent yield for this reaction : A reaction between methane and hydrogen sulfide to produce carbon disulfide and hydrogen gas was carried out. CH4 (g) + 2 H2S(g) → CS2 (g) + 4 H2 (g)

Compute the coefficient of variation and standard deviation : The following frequency distribution shows the time (in minutes) that a sample of students uses the computer terminals per day. Compute the coefficient of variation.

Compute wheelie''s interest expense deduction. : Assume the U.S. corporate tax rate is 35%, and that the applicable tax treaty exempts Wheelco's interest income from U.S. withholding tax. Compute Wheely's interest expense deduction.

Determine the number of ammonia molecules : Determine the number of ammonia molecules in 4.85g of ammonia (NA= 6.022 x 1023 mol-1).

Real side of an economy : Suppose the real side of an economy is characterized by: Y = 80K1/2 L1/2 K=100 and L= 100 G = 3000 T = 3000

Sufficient reason to conclude population standard deviation : The sample variance was s^2=16.0. does the sample show sufficient reason to conclude that the population standard deviation is not equal to 3 at the 0.05 level of significance? use the p-value method.

What is the mass in grams of the lead : The density of lead is 11.3 g/ml . The water level in a graduated cylinder initially at 217 ml rises to 286 ml after a piece of lead is submerged. What is the mass in grams of the lead?

Critical functions of real-world financial managers : Reading and understanding an organization's financial statements and accurately interpreting the information provided therein is an integral part of financial management. By analyzing and presenting on Arcadia Hospital's financial statements, stud..

What is the final temperature of the system : A 585 g piece of copper tubing is heated to 97.2°C and placed in an insulated vessel containing 51.0 g of water at 26.0°C.

User Account

All Pages

Real side of an economy

Reference no: EM13151375

Reference no: EM13151375

Questions Cloud

Reviews

Write a Review

Business Economics Questions & Answers

Advantages and disadvantages of design dominance

Discuss the effects of hiv-aids on the economies

Illustrate what effect will this have on its optimal price

Many argentine pesos

Megan used to work at the local pizzeria

Explain how high should a monopoly set its prices

Compute the short- run and long- run results

Explain how your expansionary acts would operate

Illustrate what was the least amount in dollars

Two processes are under consideration for a certain product

Illustrate what implicit assumptions are the publisher

Sales force and warehouse manager maximize ports

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT