Consider the following Macro-Model (Multiplier

Question

Consider the following Macro-Model (Multiplier –Accelerator Interaction):

Y_t= C_t + I_t+ G_t

C_t= C₀+ $\alpha$ Y_t-1

I_t = I₀ + $\beta$ ( C_t–C_t-1)

Where 0 < $\alpha$ < 1 ; $\beta$ > 0 ; and G_t= G₀

i) Find the time path Y(t) of national income, and

ii) Comment on the stability conditions.

09 Dec 2020

Answer :

Word Count : 436

To find the time path of national income (Yt) in the given Macro-Model (Multiplier-Accelerator Interaction), we need to solve the equations iteratively. Let's go step by step:

i) Time path of national income (Yt):
The equation for national income is given as:
Yt = Ct + It + Gt

First, we need to find the consumption function (Ct):
Ct = C0 + αYt-1

Next, we need to find the investment function (It):
It = I0 + β(Ct – Ct-1)

Let's substitute these equations back into the national income equation:
Yt = (C0 + αYt-1) + (I0 + β(Ct – Ct-1)) + G0

Rearranging the _____ ________ ____ _____ ____.
__________ _______ _____ _____ _______ _________ __________ ______.
_______ _______ ________ ____ ___ ____ ___.
____ ____ _________ ______ ________ ___ ______ _____ ___.
_______ ____ _______ ________ __________ _________.
_________ ________ ___ __________ ________ ______ _______ ______ ________.
__________ ______ __________ _______ __________.
_________ _______ _______ ________ _________ ___ ____.
____ _______ __________ ______ _________.
________ __________ __________ _______ _____ _________ __________ ___ _______ ________.
____ ___ _______ _______ __________ ______ ___ ____ ______ __________.
______ ______ ________ ______ _____ ________ ____ _____ ____ _____.
_____ ___ ____ ___ ________ _________ __________.
_______ ____ _______ _________ _____.
_________ ______ _______ ___ __________ __________ _______ ___ ________ _______.
_______ __________ ____ ___ _________.
___ ______ ___ ____ _____ _____.
______ ______ __________ ____ _______ ____ __________ _________.
___ _________ _____ ______ __________ _________ _____ ________.
_____ ________ _____ ___ ____ ______ __________ ________ _______ _____ ___ _______.
_________ ________ _______ ___ ________ _____ _____ _____ _______ _______ ___.
____ ___ ____ ________ ______ __________ __________ _______ _______ ____.
_________ _________ ______ _______ _________ _____ _______ ___ _______ ___.
____ ____ ______ _____ __________ ___ ________ ______ ___ __________ __________ _________.
_________ ________ ____ ____ _________ _____ _______ ___ _________ _____ _________.
____ ____ _______ _____ ______ _______ ____.
________ __________ ___ _____ ___ ____ _________ __________ __________.
______ ________ _______ _________ ___ ________ ________ ____ _____ ____.
______ _______ _________ ____ ______ ______.
______ ________ _______ _____ ___ _________ ________ __________ ___ __________ ___ __________.
____ ___ ___ __________ _______ ________.
________ ______ _______ _______ ____ ________ ____ _______ ________ _______.
__________ _____ _________ _____ ________ ____ ______ ________ _________ __________.
_________ ____ ________ __________ ____ ______ _______.
________ _____ ______ ___ ____ ________ _________ _________ _______.
___ ________ ________ _______ ___ ______ ________.
______ _____ ______ _____ ________ _________ ________ __________ _____.
_________ _________ ______ ____ __________ ___ __________ _____.
_________ _______ ______ ____ ____ ________ ____ _______.
__________ ___ ________.
Get Full Answer on WhatsApp

IGNOU Solved Assignments Assignments Ignou Projects Project Previous Year Solved Exam Papers Notes Notes Sample Question Papers Sample Question Papers

IGNOU NEWS

Assignment Submission Last Date Extended Till 30 June 2026 Click Here★★★IGNOU June 2026 TEE Date Sheet Released Click Here★★★