Suppose that consumer spending in period t, C t , is related to personal income two periods

Question:

Suppose that consumer spending in period t, C_t, is related to personal income two periods earlier, I_{t – 2}, by

Deduce that if personal income increases by a factor 1.05 each period, that is

I+1= 1.051, then I, = 1.05', and hence 1-1 C=(C0.71)(-0.2) +0.71,(1.05)-1

Describe the behaviour of C_t in the long run.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Modern Engineering Mathematics

ISBN: 9781292253497

6th Edition

Authors: Glyn James

See More Books

Question Posted: Jan 13, 2024 09:03 AM

See More Questions

The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
The roller coaster in Figure P6.36 starts with a velocity of 15 m/s. One of the riders is a small girl of mass 30 kg. Find her apparent weight when the roller coaster is at locations B and C. At...
Three particles are fixed on an x axis. Particle 1 of charge q1 is at x = a, and particle 2 of charge q2 is at x = + a. If their net electrostatic force on particle 3 of charge + Q is to be zero,...
A polystyrene component must not fail when a tensile stress of 1.25MPa (180psi) is applied. Determine the maximum allowable surface crack length if the surface energy of polystyrene is 0.50 J/m 2...
A centrifugal pump operates at $300 \mathrm{rpm}$ to deliver $20^{\circ} \mathrm{C}$ lubricating oil. A $\frac{1}{5}$-size, geometrically similar pump delivering $15^{\circ} \mathrm{C}$ water...
The contribution margin income statement of Extreme Coffee for February follows. Extreme Coffee sells three small coffees for every large coffee. A small coffee sells for $2, with a variable expense...
17. (30 Points) Suppose the following instructions are found at the given locations in memory: 20 LDA 60 560 21 ADD 61 22 OUT 23 COB 60 DAT 25 61 DAT 6 161 902 Show the contents of IR, PC, MAR, IOR,...
An economist believes that the price P t of a seasonal commodity in period t satisfies the recurrence relation where C is a positive constant. Show that where A and B are complex-conjugate constants....
Find the general solutions of the following linear recurrence relations: (a) fn+2 - 5fn+1+6f=0 (c) fn+25fn+1+6f=4" (b) fn+24fm+1+4f=0 (d) fn+25fn+1+6fn=3" -
A toy manufacturer is considering the installation of a new process machine for its toy manufacturing facility. The machine costs $350,000 installed, will generate additional revenues of $120,000 per...
Think of a group in which you have been working. How do the five-stage model and the punctuatedequilibrium model apply to this experience?
Henredon purchases a high-precision programmable router for shaping furniture components for $$190,000.$ It is expected to last 12 years and have a salvage value of $$5,000.$ It will produce...
Define performance management and explain its relationship to strategic human resource management.
For each of the assets named in Problem 9.4 (ag), state both the MACRS-GDS property class, if applicable, and the specific depreciation method to be used. (e.g., 15-year Property; 150 percent DBSLH)...
What are your companys financial objectives? What are your companys strategic objectives?
List three assumptions underlying the NPV method.
Determine the annual percentage yield for a loan that charges a monthly interest rate of 1.5% and compounds the interest monthly.
BeH 2 is linear, whereas CH 2 with two additional electrons and H 2 O with four additional electrons are both bent to a similar degree. Could these changes in geometry have been anticipated by...
Olefins assume planar (or nearly planar) geometries wherever possible. This ensures maximum overlap between p orbitals and maximum Ï-bond strength. Any distortion away from planarity should...
Further information about the mechanism of the ethyl formate pyrolysis reaction can be obtained by replacing the static picture with a movie; that is, an animation along the reaction coordinate....
Explain following cisco technologies and their usage. a) Adaptive Security Device Manager (ASDM) b) Cisco configuration Professional (CCP) c) Cisco Access Control Server (ACS) d) Zone-Based Policy...
loud computing is an option for hardware, software, and complete information technology (IT) infrastructure solutions. Conduct research on the topic of cloud computing, and discuss two of the...
d) List the possible risks that may be encountered through this transformation, and suggest changes to the change management process, which you could present to stakeholders. Possible Risks Enter a...

Suppose that consumer spending in period t, C t , is related to personal income two periods

Question:

C = 0.87512 0.2C_ (t2) -

Step by Step Answer:

General solution If at t 1 C C then C 0875...View the full answer

Modern Engineering Mathematics

Students also viewed these Sciences questions