Please answer them separately so I can rate them all Real Sector Y = Z Output eq
ID: 1241270 • Letter: P
Question
Please answer them separately so I can rate them all
Real Sector Y = Z Output equals aggregate demand, an equilibrium condition Z = C + I + G Definition of aggregate demand C = c0+ c1YD Consumption fn, c1 is the marginal propensity to consume YD =Y-T + Tr Definition of disposable income T = t1Y Tax function; t1 is marginal tax rate. Tr = TR0 Transfer payments; TR0 is lump sum transfers. I = b0 + b1Y -b2i Investment function G = GO0 Government spending on goods and services, exogenous Asset Sector Md/P = Ms/P Equilibrium condition Ms/P = M0/P Real money supply Md/P = mu 0 + Y -hi Real money demand Look up on Bloomberg or elsewhere the yield on a one year T-bill. Calculate the price as if the bond were to mature one year from now (specify the date you looked up the data). Show your calculations. Once again, look up the one year and two year yields. Assuming the expectations hypothesis of the term structure holds, what is the expected interest one year interest rate, one year from today. Show your calculations. Draw the yield curve, for 3 months to 30 years. Assuming the expectations hypothesis of the term structure holds (i.e., there is no liquidity premium), do you expect the US economy to go into recession in the next year? Why or why not?Explanation / Answer
yes .US economy will go into recession