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Macroeconomics Problem Set 1

To derive the PS approximation, data on GDP, Consumption, and Government expenditures was obtained from the website as detailed in the homework. Then using excel I was able to recreate the formula given with the actual data to get the approximation numbers. B. The true measure of PS was obtained much the same way as the approximation, only this time I used data for Private Sector Savings and Private Disposable Income pulled from the database instead of Y, C, and G. C. Attached. Overall it’s not a terrible approximation. There appears to be a rough five billion dollar inflation in the approximation from the true value, but over the course of time the trends remain similar. Every now and then…

Boeing:how low can they fly?

Prepare problems 3, 5 and 7 on pp.521 and the additional problem, Principles of Economics, Case, Fair and Oster. Problem 3 p.521 For each of the following statements, decide wether you agree or disagree and explain your answer : 1. During period of budget surplus (when ? < ? ), the government debt grows. 2. A tax cut will increase the equilibrium level of GDP if the budget is in deficit but will decrease the equilibriumm level of GDP if the budget is in surplus. 3. If the ? ? ? = 0.90, the tax multiplier is actually larger than the expenditure multiplier. Problem 5 p.521 Expert economists in the economy of Yuk estimate the following : Real output/income 1000…