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    Macro Tutorial Set

    Uploaded by

    Flavious Acquah
    This document provides 7 practice problems for analyzing macroeconomic models and policies using the IS-LM framework. The problems cover: [1] Deriving consumption and savings functions from household income and savings data. [2] Analyzing the effects of expansionary/contractionary fiscal and monetary policies on output and interest rates. [3] Graphing and explaining the effects of a monetary expansion combined with a fiscal contraction. [4] Finding equilibrium output and interest rates using IS and LM curves. [5-6] Additional practice problems analyzing the effects of changes in policy instruments. [7] Calculating equilibrium output, consumption, imports, tax revenue and savings under different fiscal policy scenarios.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Macro Tutorial Set

    Uploaded by

    Flavious Acquah
    8 views3 pages
    This document provides 7 practice problems for analyzing macroeconomic models and policies using the IS-LM framework. The problems cover: [1] Deriving consumption and savings functions from household income and savings data. [2] Analyzing the effects of expansionary/contractionary fiscal and monetary policies on output and interest rates. [3] Graphing and explaining the effects of a monetary expansion combined with a fiscal contraction. [4] Finding equilibrium output and interest rates using IS and LM curves. [5-6] Additional practice problems analyzing the effects of changes in policy instruments. [7] Calculating equilibrium output, consumption, imports, tax revenue and savings under different fiscal policy scenarios.

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    Macro economics tutorial question.

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    This document provides 7 practice problems for analyzing macroeconomic models and policies using the IS-LM framework. The problems cover: [1] Deriving consumption and savings functions from household income and savings data. [2] Analyzing the effects of expansionary/contractionary fiscal and monetary policies on output and interest rates. [3] Graphing and explaining the effects of a monetary expansion combined with a fiscal contraction. [4] Finding equilibrium output and interest rates using IS and LM curves. [5-6] Additional practice problems analyzing the effects of changes in policy instruments. [7] Calculating equilibrium output, consumption, imports, tax revenue and savings under different fiscal policy scenarios.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    8 views3 pages

    Macro Tutorial Set

    Uploaded by

    Flavious Acquah
    This document provides 7 practice problems for analyzing macroeconomic models and policies using the IS-LM framework. The problems cover: [1] Deriving consumption and savings functions from household income and savings data. [2] Analyzing the effects of expansionary/contractionary fiscal and monetary policies on output and interest rates. [3] Graphing and explaining the effects of a monetary expansion combined with a fiscal contraction. [4] Finding equilibrium output and interest rates using IS and LM curves. [5-6] Additional practice problems analyzing the effects of changes in policy instruments. [7] Calculating equilibrium output, consumption, imports, tax revenue and savings under different fiscal policy scenarios.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    ECO 202: ELEMENTS OF ECONOMICS II

    TUTORIAL SET

    1. In a certain year, Ghanaian household save 20 percent of their disposable income. Ceteris

    paribus, they will dissave Gh₵ 60 when they receive no income.

    Derive the savings function

    Find the consumption function

    Also, given, I = 116 – 2i, L = 0.20Y – 5i and M = 120.

    c. find the IS and LM equations

    d. Graph the curves

    e. find the equilibrium output and interest rate

    2. Find the effect on national income and interest rate for the following:

    a. Expansionary fiscal policy

    b. Contractionary Fiscal policy

    c. Expansionary monetary policy

    d. Contractionary monetary policy

    3. Using the ISLM model, show graphically and explain the effects of a monetary expansion

    combined with a fiscal contraction. How do the equilibrium level of output and interest rate

    change?

    4. Given the following about an economy:

    Cd = 360 − 200r + 0.1Y Id = 120 − 400r G = 120


    Ms= 100 + 0:2Y - 2000i M = 300 P=2

    Find an equation for desired national saving

    What value of the real interest rate clears the goods market when Y = 550? When Y =

    600? When Y = 650?

    What is the real interest rate r that clears the asset market when Y = 550? When Y = 600?

    When Y = 650?

    Graph the IS and LM curves.

    Find equilibrium national output and interest rate.

    Find Cd, Id at equilibrium.

    6. Consider the following:

    C = 100 + 0.5Yd I = 500 -1200r + 0.1Y G = 200 T = 200

    Md = 0.5Y – 5000r Ms = 500

    Find the equation of the IS curve

    Find the equation of the LM

    Solve for the equilibrium output and interest

    Find the equilibrium values of consumption and investment.

    What will be the effect on national output and interest rate when government expenditure

    increases by 20%?

    7. Given that the following information about the Ghanaian economy;

    C = 100+0.7Yd I = 110 G = 200

    TR = 80 X = 40 M = 20+0.5Y

    T = 60+0.37Y
    a) calculate the equilibrium national income.

    b) calculate the amount of consumption and import at equilibrium income level.

    c) if government expenditure falls by 20%, calculate the new equilibrium national income, hence
    the new level of consumption and import.

    d) find the induced tax and interpret it.

    e) calculate the private savings, government savings and the national savings.

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