1. An economy is described by the following equations: Expenditure Sector: Money Sector: S = - 200 + (1/5)YD Ms = 400 TA = (1/8)Y - 40 Md = (1/4)Y + 100 - 5i TR = 60 I = 300 – 10i G = 70 NX = 150 - (1/5)Y Here S is saving; TA is taxes; TR is transfers; I is investment; G is government spending; NX is net exports; Ms is money supply; and Md is money demand. a) (30p) Find the IS and LM equations for this economy. Draw those equations in an IS-LM framework. b) (20p) Find the equilibrium level of output and interest rates. Calculate also the equilibrium values of investment (I), net exports (NX), and money demand (md).

What two things do you consider when evaluating the time value of money

Identify whether the statements are true or false by dragging and dropping the appropriate term into the bin provided. long-run economic growth is unlikely to be sustainable because of finite natural resources. in the modern economy, countries that possess few domestic natural resources essentially have no chance to develop economically. finding alternatives to natural resources will be very important to long-term economic growth. in the modern economy, human and physical capital are generally less important in productivity than natural resources. in the 19th century, countries with the highest per capita gdp were nearly always abundant in minerals and productive farming land.

In each of the cases below, assume division x has a product that can be sold either to outside customers or to division y of the same company for use in its production process. the managers of the divisions are evaluated based on their divisional profits. case a b division x: capacity in units 200,000 200,000 number of units being sold to outside customers 200,000 160,000 selling price per unit to outside customers $ 90 $ 75 variable costs per unit $ 70 $ 60 fixed costs per unit (based on capacity) $ 13 $ 8 division y: number of units needed for production 40,000 40,000 purchase price per unit now being paid to an outside supplier $ 86 $ 74 required: 1. refer to the data in case a above. assume in this case that $3 per unit in variable selling costs can be avoided on intracompany sales. a. what is the lowest acceptable transfer price from the perspective of the selling division? b. what is the highest acceptable transfer price from the perspective of the buying division? c. what is the range of acceptable transfer prices (if any) between the two divisions? if the managers are free to negotiate and make decisions on their own, will a transfer probably take place?