Econ 7303 Macroeconomics Individual Assignment 2 (Assessment Weight= 6%)

This study source was downloaded by 100000867488176 from CourseHero.com on 05-21-2023 15:05:36 GMT -05:00https://www.coursehero.com/file/198373978/ECON-7303-Macroeconomics-assignment-2docx/ ECON 7303 MacroeconomicsIndividual Assignment 2 (assessment weight= 6%)QUESTION 1Given the model1. Labour market:Y = (1 N - 0.52 N 2),where , 1 , 2 > 0; N = laborThe supply of labor, NS isNS = 0 + 1 (1-t)wwhere 0 , 1 > 0, t = tax rate, w = wage ratea) Derive an equation representing the demand for labor, say ND. b) Find the equilibrium wage rate, output (Yf ), and employment ( Nf ) 2. Good market:The desired consumption, C d isC d = 0 + 1 (Y - T) - 2 rwhere 0 , 1 , 3 > 0, Y = income, T = taxes, r = real interest rateT = 0 + 1 Y, where 0 , 1 > 0Desired investment, Id :I d = 0 - 1 r, where 0 , 1 > 0a) Derive IS-curve 3. Money market:Demand for money, M d/P :M d/P = 0 - 1 (r + e) + YWhere , , e > 0,Money supply = M/Pa) Derive the LM curve 4. General equilibrium:Using IS-curve and LM-curve, as above, find the equilibrium price level and interest