Question: Consider the following system of nonlinear equations, f(x, y) + g(y) + z mo, Y m(x, y) = = where f, g, and m

Consider the following system of nonlinear equations, f(x, y) + g(y) +

Consider the following system of nonlinear equations, f(x, y) + g(y) + z mo, Y m(x, y) = = where f, g, and m are all continuously differentiable. We regard x and y as endogenous (unknown) variables, and z and mo as exogenous (given) variables. (i) Suppose there is a shock to mo, say Am, estimate how much x is affected. (ii) Suppose there is a shock to z, say Az, estimate how much y is affected.

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