1101-011Shert Quiz4 f17 Exzel Insrrt Draw Pagr laynut Formulas Data Rrview View
ID: 1110482 • Letter: 1
Question
1101-011Shert Quiz4 f17 Exzel Insrrt Draw Pagr laynut Formulas Data Rrview View Tell me what you want to do B 1 u , | E. Conditional rormat asl Neuual Fomatting-lable Irsert Delete Fermat = = = t-E-Merge& Center , $ , % , to Sert & Find & Filter- Select Calculation Check Cell Format Painter Farng D30 86 87 88 4. Gaps & the Interest Rate (5) 89 90 91 92 93 94 95 96 97 98 A. For the model of the economy below, use the r values to compute the equilibrium levels of Y B. If potential output, Y*, is 3000, fill in the Gap column C. In the Interest Rate Policy column, type "up," "same" or "down" for the movement on th interest rate to eliminate the gap Equillbrlum Y with C,I,G, NX & T Interest Rate Polic C5500.8 (Y-T) -2000*r l400 2000*r Ga 300 NX = 100 T = 250 Ga 0.025 0.05 0.075 100 101 102 103 104 105 106 107 0.125 0.15 0.175 0.2 0.225 Problems Mini-tuto + 120% 1:53 PM Type here to searchExplanation / Answer
Y = C + I + G + NX
Y = 550 + 0.8Y - 200 -4000r + 800
0.2Y = 1150 - 4000r
Y = 5750 - 20000r
Gap = Y - 3000
interest rate needs to be increased when the output gap is positive and needs to be decreased when the output gap is negative.
r Y Gap Interest rate Policy 0.025 5250 2250 Up 0.05 4750 1750 Up 0.075 4250 1250 Up 0.1 3750 750 Up 0.125 3250 250 Up 0.15 2750 -250 Down 0.175 2250 -750 Down 0.2 1750 -1250 Down 0.225 1250 -1750 DownRelated Questions
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