Macroeconomics

1. Assuming a closed economy, determine the effects of this measure on the level of income, consumption, savings, nvestment and government budget balance. (5%). represent using graph
2. If we now assume an open economy, determine the impact of this measure on the exchange rate and the external balance of the economy as well as the consequences of this effect on income, consumption, savings, investment and public budget balance. represent using graph 
3. Are these expansive or recessive effects? (5%).

Note: In all sections of the exercise it is required that the explanations be made using the corresponding equations, the necessary causal sequences, the results, the graphs and in a reasoned written form.

The Central Bank of the economy of an advanced country considers it advisable to reduce the inflation target rate 

It is requested:

1. Assuming a closed economy, determine the effects of this measure on the level of income, consumption, savings, nvestment and government budget balance. (5%).
2. If we now assume an open economy, determine the impact of this measure on the exchange rate and the external balance of the economy,
   as well as the consequences of this effect on income, consumption, savings, investment and public budget balance.
3. Are these expansive or recessive effects? (5%). remember to show using graphs

(Note: In all sections of the exercise it is required that the explanations be made through the corresponding equations, the necessary causal sequences, in a reasoned manner, the graphs and the final results)

In an advanced country, an expansionary fiscal policy is carried out by increasing transfers, in order to improve the well-being of families.

1. Initially considering a closed economy, with the required instruments, determine the causality and effect of this policy on the level of income, disposable income, consumption, savings, investment and public budget balance. (10%)
2. Now let's consider an open economy. Likewise, analyze the effects of this measure on the foreign balance, on the exchange rate of the country's currency and on the surrounding economies with which the country has close commercial and financial relations. (7.5%)
3. Finally, economic expansion causes an increase in effective inflation. If the Central Bank follows the Taylor Rule as a rule, what decision will it make? also analyze the effects of this decision on income, disposable income, consumption, savings, investment, budget balance and external balance of the country's economy. Also analyze the effect that this measure will have on the surrounding countries. (12.5%)

remember to do the graphs!

answer, the necessay casual sequences, In a reasoned manners, using graphs and the final answers

In an advanced country, an expansionary fiscal policy is carried out by increasing transfers, in order to improve the well-being of families.

1. Initially considering a closed economy, with the required instruments, determine the causality and effect of this policy on the level of income, disposable income, consumption, savings, investment and public budget balance. (10%)
2. Now let's consider an open economy. Likewise, analyze the effects of this measure on the foreign balance, on the exchange rate of the country's currency and on the surrounding economies with which the country has close commercial and financial relations. (7.5%)
3. Finally, economic expansion causes an increase in effective inflation. If the Central Bank follows the Taylor Rule as a rule, what decision will it make? also analyze the effects of this decision on income, disposable income, consumption, savings, investment, budget balance and external balance of the country's economy. Also analyze the effect that this measure will have on the surrounding countries. (12.5%)

These are the macroeconomic data of an economy:

C = 600 + 0.6Yd; T = 700 + 0.3Y; | = 9000 + 0.08Y - 600 (i-t°+x); G = 12500; Tr= 1300

In addition, the Central Bank sets the interest rate according to the Taylor Rule, i = i* + 1.25 ( - 7°) - 0.5(u-un) with the following

additional data: /*=3；ポ=2：Un=4.

Take into account that the CB will not set negative interest rates, substituting those for a zero interest rate in such cases.

Determine:

に

Given a 2% probability of default, determine the income level, disposable income, interest rate, investment, and

government Budget balance if the effective inflation is =4 and unemployment is u = 8. (assesment 5%)

b)

An excess aggregate demand in relation to aggregate supply leads to an increase in effective inflation up to n = 7. Which reaction do you expect from the Central Bank, according to the Taylor rule? Determine the impact of this reaction on the income level, investment, and government Budget balance (assesment 2.5%). Draw a graphical representation of the change (IS-LM model).

c) Which consequences can the reaction of the Central Bank have on the amount of credit, firms revenues and private Banks balances? What could happen in this situation with the risk premium? (assesment 7.5%). Do the theoretical explanation and do a graphical representation of this change (IS-LM model). Remember to do graph

El gobierno de un país avanzado grande, cuya economía responde al modelo ISPM de economía abierta, con perfecta movilidad de capitales y tipo de cambio flexible, determinado por la variación de la paridad de intereses, lleva a cabo una política fiscal expansiva mediante el incremento del gasto público (G).

b) se puede producir inflación (como consecuencia de un incremento de la demanda agregada), o desempleo (si la demanda agregada se reduce). Teniendo en cuenta que el Banco Central sigue una regla de Taylor, ¿qué decisión debería tomar el Banco Central, según haya inflación o desempleo? (Explica qué ecuación se vería modificada y cómo). Realiza la explicación escrita, mediante gráfico y secuencia causal 
c) Según cuál sea la decisión del BC, ¿Qué efecto tendrá sobre el tipo de cambio de la moneda del país? Realiza la explicación escrita, mediante gráfico y secuencia causal.