University:
University of Toronto
Course:
ECO102 | Principles of Macroeconomics
Academic year:

2023
Views:

346

Pages:

3
Author:

Arlene R.

2.we know we want p.40. 4'80AE.34+08(7-025-T).15.10.25-0.11-40AE=Y7.44.051-0.8T0.5%.44-0.8T0.8T-44-0.5(80)T=55-50T.5CHECKAE:34.0814-0251-T $15.10.25-0.14-407.80.0.5%-P0.5Y.80-PY=160-2PT.AE-AD)AD=160-2PAS,=AD2P. 160-2P4P-160 P=40C.It requires a bigger change in T because indirect takes only affect AE through the MPC = 0.8. To shift theAE curve from AE = 60+0.5Y - Pwe can either use a $20 increase in G or a $25 cut to taxes because 0.8X 25 = 20. Tutorial 04Q1)An economy is described by AS = 0.5P, C = 300+0.8(Y-0.25Y), - I = 300, G = 100and NX = 700 -0.1Y-0.25P Calculate the equilibrium level of real GDP.1400C-300.08(1-0.251)(-300.0.81-0.24C=300+0.6YAE.C.I.G.NX3000.0.6).3000.100.700. - 0.17.0.25PAE-YEQUILIBRIUMAS-AD7.1400.054.0.25P0.5P.2800.0.5P0.57.14000.00.25PP-28007.2800.0.5PAE.Y AE-ADAD-2800-005Py.2800-0.5?2800y.1400Real GDPQ2) The AD curve will become flatter if MPC increases.MPC - marginal propensity to consume"REASON: marginal propensity deals withaffect GDP essentially how GDP will rise & fall based on certain factors 0.87.0.081-4C-1000.08(1-011-5)C.96.0.721b.T.ty-GC.I.G.NX1.0.1(610).20096.0721.4.200.5-p-0.127138 (deficit)AE 305.067 P Y:AE(D.4Y.305 -Pb=0AD . 762.5 - 2.5P0.1.01(610).GADo ASY=ASG.62762.5-25P.10PY=10P+762.5.12.5P6161.PYo.610AE, 96 +072Y.4.62.5-P-0.12-Y.167.0.64 -P0.4Y . 167 - PY=ASAD = 417.5-2.5P1:10(P)TAD-AS33.4417.5 . 12.5Py=334P=33.4

ECO102: Tutorial 04

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