##### 🍐 我们总结了加拿大代写中——Econ代写的经典案例，如果你有任何代写的需要，可以随时联络我们。CoursePear™ From @2009。(KPU代写)

1. “An increase in disposable income will shift S and C functions in the same direction.”(5)

False. Disposable income is ON the graph (horizontal axis), thus it causes a MOVEMENT up along both S and C function. Only if it were OFF the graph (like, for example, wealth, real interest rates or consumer confidence) would it cause a shift.

More disposable income makes it easier to save and consume (so when there are movements, they are in the SAME direction: in this case upward).

By contrast, shifts always happen in the opposite direction, because they are drawn on the assumption Yd is unchanged (see Mini Lecture 1).

• The following data (in billions of \$) describes a demand-determined economy:
AE=1,500+0.6Y
a)Graph the AE function. Marks will be deducted for missing labels. (2)
b) Find the equilibrium national income and show it on the graph above. (3 marks: 2 for calculation and 1 for graphing) Show all of your calculations.
• Please see the graph below (not strictly to scale).
• AE=Y

1500+0.6Y=Y

1500=Y-0.6Y

1500=0.4Y

Y=1500/0.4=3750

• Government chooses to reduce its spending and increase its net tax at the same time. Ceteris paribus, show and briefly explain how this will affect the Canadian Budget Balance function.(5)

Note that both changes improve the budget balance.

BB = T (which increases) – G (which decreases)

As seen above, G is autonomous (no level of income changes G; when G changes it is for reasons other than income) while T is induced (with a constant net tax rate t you can collect more if you apply it to a higher income Y: hence T slopes up).

Two points are critical when graphing BB function: vertical intercept which is -G and Balanced Budget Y which is a point at which BB function crosses the Y axis, meaning the point where BB=0 (taxes collected equal government spending).

1. “An increase in disposable income will shift S and C functions in the same direction.”(5)

False. Disposable income is ON the graph (horizontal axis), thus it causes a MOVEMENT up along both S and C function. Only if it were OFF the graph (like, for example, wealth, real interest rates or consumer confidence) would it cause a shift.

More disposable income makes it easier to save and consume (so when there are movements, they are in the SAME direction: in this case upward).

By contrast, shifts always happen in the opposite direction, because they are drawn on the assumption Yd is unchanged (see Mini Lecture 1).

• The following data (in billions of \$) describes a demand-determined economy:
AE=1,500+0.6Y
a)Graph the AE function. Marks will be deducted for missing labels. (2)
b) Find the equilibrium national income and show it on the graph above. (3 marks: 2 for calculation and 1 for graphing) Show all of your calculations.
• Please see the graph below (not strictly to scale).
• AE=Y

1500+0.6Y=Y

1500=Y-0.6Y

1500=0.4Y

Y=1500/0.4=3750

• Government chooses to reduce its spending and increase its net tax at the same time. Ceteris paribus, show and briefly explain how this will affect the Canadian Budget Balance function.(5)

Note that both changes improve the budget balance.

BB = T (which increases) – G (which decreases)

As seen above, G is autonomous (no level of income changes G; when G changes it is for reasons other than income) while T is induced (with a constant net tax rate t you can collect more if you apply it to a higher income Y: hence T slopes up).

Two points are critical when graphing BB function: vertical intercept which is -G and Balanced Budget Y which is a point at which BB function crosses the Y axis, meaning the point where BB=0 (taxes collected equal government spending).

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