Let the production function be F=A(10N-0.005N^2), where A=2. The labor supply curve is Ns=32+10(1-t)w, where w is the re
Posted: Wed Jul 06, 2022 6:33 pm
Let the production function be F=A(10N-0.005N^2), where A=2. Thelabor supply curve is Ns=32+10(1-t)w, where w is the real wage andt=0.5 is the tax rate. Let r be the real interest rate, the desiredconsumption and desired investment can be described byCd=650+0.8(Y-T)-100r and Id=650-100r, respectively. Government taxis T=40+0.5Y and government purchase is G=97.6. Real money demandfunction is L=0.5Y-250i, where i is the nominal interest rate.Assume nominal money supply is fixed at 27700, and the expectedinflation rate pi^e=2%.
A. Calculate the general equilibrium level of real wage,employment and output.
B. Find the equation that describes the IS curve.
C. Calculate the real interest rate, consumption and investmentin the general equilibrium.
D. Find the equation that describes the LM curve.
E. Find the equation that describes the AD curve.
F. Calculate the price level in the general equilibrium
G. Find the equation that describes the FE curve.
A. Calculate the general equilibrium level of real wage,employment and output.
B. Find the equation that describes the IS curve.
C. Calculate the real interest rate, consumption and investmentin the general equilibrium.
D. Find the equation that describes the LM curve.
E. Find the equation that describes the AD curve.
F. Calculate the price level in the general equilibrium
G. Find the equation that describes the FE curve.