83 254
Assignments Done
99,2%
Successfully Done
In February 2020

# Answer to Question #20928 in Macroeconomics for lyndon bowen

Question #20928
Q1b Assume the aggregate supply relationship (between output and the price level) in a particular economy takes the following form, where all variables are represented as logs; EQU-1&#039; is; y2 = c - d (w - p) where y2= level of output, p= price level, c & d are positive constants (i.e. c&gt;0, d&gt;0) w is the fixed value of the nominal wage and where c&lt;dw. Further assume that aggregate demand is determined as follows and subject to influence by fiscal & monetary policies as described by the following equation; EQU-2&#039; is; yd = e + a1,jg + a12 (m - p); where yd is the level of aggregate demand, g represents the setting of government spending, m is the setting of nominal money supply, e is a positive (i.e. e&gt;0), a1,j (where j=1,2) are coefficients indicating the input of each policy instrument on aggregate demand, and a1,j &gt; 0 (where j=1,2) The question is; using EQU-1 & EQU-2 above to solve for equilibrium values of p & y in terms of the settings of g and m, the a (&#039;subscript&#039; 1,j) and the other model
1
2012-12-21T04:40:27-0500
EQU-1&#039; is; y2 = c - d (w - p)
EQU-2&#039; is; yd = e + a1,jg + a12 (m - p);
p = (e + a1,jg + a12m - c + dw) / (a12 - d)
where &quot;m&quot; quot;g&quot; are variable values,and &quot;p&quot; have a direct relationship, and other values are coefficients
and/or constants

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!