题目
题目

FA25 ECON 302 002 Homework #8 (IS Curve)

单项选择题

Consider the following model of the IS curve without an international sector (i.e., imports = exports = 0). Final expenditures are characterized by the following three equations: Consumption: 𝐶 𝑡 𝑌 ¯ 𝑡 = 𝑎 ¯ 𝑐 + 𝑏 ¯ 𝑐 ( 𝑅 𝑡 − 𝑟 ¯ ) Investment: 𝐼 𝑡 𝑌 ¯ 𝑡 = 𝑎 ¯ 𝑖 − 𝑏 ¯ 𝑖 ( 𝑅 𝑡 − 𝑟 ¯ ) Government expenditure: 𝐺 𝑡 = 𝑎 ¯ 𝑔 𝑌 ¯ 𝑡 Assume that ∞ > 𝑏 ¯ 𝑖 > 𝑏 ¯ 𝑐 > 0 . In contrast to the assumptions we made in class, consumption in this version of the model responds to changes in the real interest rate. Based on this information, the IS curve is:

选项
A.horizontal.
B.vertical.
C.less steeply sloped than the “standard” IS curve with 𝑏 ¯ 𝑐 = 0 .
D.more steeply sloped than the “standard” IS curve with 𝑏 ¯ 𝑐 = 0 .
E.Not enough information is given.
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思路分析
Question restatement: We’re looking at a closed-economy IS curve model (no international sector) with three expenditure equations: C_t/Ybar_t = a_bar_c + b_bar_c (R_t − r_bar), I_t/Ybar_t = a_bar_i − b_bar_i (R_t − r_bar), and G_t = a_bar_g Ybar_t. Given assumptions ∞ > b_bar_i > b_bar_c > 0 and that consumption now responds to changes in the real interest rate, we are asked to determine the IS curve’s slope. Option A: horizontal. This would imply that output Y is completely unresponsive to changes in the real interest rate R_t. In this model, both consumption and investment respond to R_t (via the terms involving (R_t − r_bar)), so achange in R_t changes C and I, and hence Y. Therefore, a purely horizontal IS is inconsistent with the stated equations and the stated responsiveness. This option mischaracterizes the mechanism by which R_t affects aggregate ......Login to view full explanation

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类似问题

Consider the IS curve 𝑌 ~ 𝑡 = 𝑎 ¯ − 𝑏 ¯ ( 𝑅 𝑡 − 𝑟 ¯ ) + 𝑥 ¯ 𝑌 ~ 𝑡 , where 𝑏 ¯ = 1 , 𝑥 ¯ = 1 / 4 , and 𝑅 𝑡 − 𝑟 ¯ = 0.03 . If there is a positive demand shock where the economy goes from 𝑎 ¯ = 0 to 𝑎 ¯ = 0.05 , then short-run output changes by ______ percentage points (enter a negative number for a fall in short-run output and a positive number for a rise in short-run output). Round your answer to the nearest tenth of a percent.

Using the IS curve 𝑌 ~ 𝑡 = 𝑎 ¯ − 𝑏 ¯ ( 𝑅 𝑡 − 𝑟 ¯ ) , in the long run,  𝑎 ¯ [ Select ] equals 0 equals 1 and 𝑅 𝑡 [ Select ] > < = 𝑟 ¯ , so that [ Select ] the economy's actual output equals potential output. the economy is in a boom the economy is in a recession .

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Consider the IS curve 𝑌 ~ 𝑡 = 𝑎 ¯ − 𝑏 ¯ ( 𝑅 𝑡 − 𝑟 ¯ ) + 𝑥 ¯ 𝑌 ~ 𝑡 , where 𝑏 ¯ = 1 , 𝑥 ¯ = 1 / 4 , and 𝑅 𝑡 − 𝑟 ¯ = 0 . If there is no demand shock, i.e. 𝑎 ¯ = 0 , and the real interest rate increases by 1 percentage points, then short-run output changes by ______ percentage points (enter a negative number for a fall in short-run output and a positive number for a rise in short-run output). Round your answer to the nearest tenth of a percent.

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