代写ECON3003 Intermediate Macroeconomics S1, 2024-25代写C/C++程序

ECON3003 Intermediate Macroeconomics

S1, 2024-25

This is an individual assignment. You are expected to complete it on your own without copying from other student(s) and without letting other student(s) copy from you. Please strictly observe UIC’s academic honesty policy. All parties involve with plagiarized work will receive zero mark. Generative AI not allowed.

Assignment 1 (due Wednesday 5pm, October 16)

1.    (Total 25 marks)  Consider a  simple economy which produces two final goods, soybeans and coffee beans. The table below shows the prices and productions of the two goods in 2020, 2021, and 2022.

	2020		2021		2022
	Price	Quantity	Price	Quantity	Price	Quantity
Soybeans	1	1000	1	1100	1	1210
Coffee Beans	2	1000	3	1200	4	1440

Suppose that 2020 is selected as the base year,

a.    (3 marks) Compute the nominal GPD in each year.

b.    (2 marks) Compute the real GDP in each year (in 2020 dollars).

c.    (2 marks) Compute the growth rate in real GDP from 2020 to 2021 and that from 2021 to 2022 using the real GDP obtained in part b.

d.    (16 marks) Compute the real GDP growth rate from 2020 to 2021 and that from 2021 to 2022 using the chain-type method [Hint: refer to procedures in Appendix of Ch.2]. Compare these growth rates to the growth rates calculated in part c, Do the growth rates calculated in part c overstate or understate economic growth? Explain.

e.    (2 marks) Calculate the real GDP in chained 2020 dollars for 2021 and 2022 using growth rates derived in d.

2.    (Total 25 marks) Consider the following economy.

C = a + b(Y − T), I  = I0

       Y = C + I + G

Now assume that  a  = 200,  b = 0.8, G = 200, T = 200    and  I0   = 200.

a.   (3 marks) What are the equilibrium income and consumption?

b.   (4 marks) What is the autonomous spending? What is the value of the multiplier for this economy?

c.   (6 marks) Suppose now the country is open up to foreign trade. Five percent of the disposable income is spent on imports  IM   [Hint: write down the import function first]. Export  X  remains zero. What is the income after the change? What are the corresponding autonomous spending and the value of the multiplier? (Make sure that the income is equal to the product of the autonomous spending and the multiplier.)

d.   (7 marks) Draw a Demand-Output diagram to illustrate the adjustment process from the equilibrium in part a) to the equilibrium in part c).

e.   (5 marks) Suppose the government wants to keep the income level in part a) and a balanced budget  (G  = T)  at the sametime. They plan to increase  T   and  G  equally to achieve these two objectives after the country opens up to trade. Do you think that such policy can be successful? If the answer is yes,  how much the government has to spend?

3.    (Total 25 marks) The money demand in a small country can be described by the

function (in the relevant range of interest),

Md  = $Y × (1.2 − 10 i),

where  $Y   is the nominal income, currently equal to $6,000 billion, and  i   the interest rate (in ratio or decimal places, not in %).

a.   (4 marks) Suppose the people in that country do not hold currency, their central bank money (monetary base) amounts to $300 billion, and the reserve ratio  θ is 0.125. Find the interest rate assuming their financial market is in equilibrium.

b.   (5 marks) Continued from Part a., now their central bank just decided on a new monetary policy, which is to achieve the target interest rate of 6% by means of open market operation (OMO). Explain what specific OMO is required, and calculate the central bank money and the money supply by the end of the said OMO.

c.   (8 marks) Alternative to the above, suppose people do hold currency, in the amount of 1/5 of their total money demand, and the central bank money and reserve ratio are the same as in Part a.. Find the money supply and the interest rate assuming their financial market is in equilibrium.

d.   (2 marks)  Suppose  instead that the people hold  1/10  of their  total money demand as currency, will the money supply in their country be more or less than you calculated in Part c. assuming everything else is the same? Explain without calculations.

e.   (6 marks) Alternative to the c.  and d. above,  suppose the people hold $100 billion currency, and central bank has only government bonds as assets, and the central bank money and reserve ratio are the same as in Part a.. First, calculate the money supply, then, draw the balance sheet of the central bank.

4.    (Total 25 marks) We have the following information for the economy:

Goods Market	Money Market
C = 100 + 0.5(Y − T)	Ms = 4000
I = 50 − 2i	P = 10
G = 200;   T = 100	L(Y, i) = Y − 6i

Note that interest rate  i  is expressed in percentage points e.g.  i  = 2(%)  and real output  Y  is embedded in the liquidity preference equation  L(Y, i) ,  so  MD   = PL(Y, i).

a.    (3 marks) Find the IS equation,i.e. express  Y   as a function of interest rate  i.

b.    (2 marks) Given that the central bank is targeting an interest rate of 10%, write down the LM equation.

c.    (5  marks)  Solve  for the  equilibrium real  output.  At  this  output  level,  is equilibrium  immediately  attained  in  the  Money  Market?  Explain.  What measure does the central bank needs to impose to restore a Money Market equilibrium (and sustain the equilibrium real output) in case it is not already there?

d.    (5 marks) Given an equilibrium in the economy, find the level of consumption ( c ) and investment  ( I ) respectively.  Show  that the investment  equals to national saving in this situation.

e.    (10  marks)  Not  satisfied  with the equilibrium state in d., the government decided to implement an expansionary fiscal policy by increasing government spending by 50% (with central bank holding onto its target interest rate). Find the new equilibrium real output. Verify that you can get the same answer by using the output multiplier.