Equations For Fiscal Policy And Changes In Transfers And Bonds Essay.

1. 0 million dollars.
2. lower the interest rate.
3. both the money market and goods markets are in equilibrium.

1. Given the tax function, T = T0 + tY
2. The government expenditure multiplier=
3. T = T0 + tY, with t=1, say, and C= c0 + b(Y-T)

With t = 0, T = T0,

With t= 1, T1 = T0 + Y

T1 > T

By the equation, Y = C+ I+ G = c0 + b(Y-T) + I + G

When t=0, Y0 = c0 + b(Y-T0) + I + G

• When t= 1, Y1 = c0 + b(Y-T0 -Y) + I + G = c0 –bT0  + I + G
• Or , Y1 < Y0; because the there is a negative sign for bT0 which subtracted instead of addition. The IS curve shifts to the left because the consumption falls,

2. Y = C + I +G.

C = 50+0.75(Y −T ).

I = 150−10r.

Md/ P = Y −50r.

G= 250.

T = 200.

Ms/P = 750.

1. IS = C + I + G

• IS = 50 + 0.75(Y −T ) + 150 – 10r + 250

LM = M^d/P = M^S/P

• LM = M^d – M^S
• LM = Y- 50r – 750

1. In equilibrium IS = LM

Or, 50 + 0.75(Y-T) + 150 -10r +250 = 50r – 750

• 75 Y – 0.75T + 450 -10r = 50r -750
• 75Y = 0.75T -1200 + 60r = 0.75(200) -1200 +60r
• 75Y = 150 – 1200 + 60r
• 75Y = 60r -1050
• Y =
• Y =

Table 1 Series Of Transfers To Households From 2019 To 2021

Source: (Www150.statcan.gc.ca 2022)

1. The table below shows the series of total government bonds from 2020 to 2021, with a monthly frequency

Table 2 Series For Total Government Bonds From 2019 To 2021

Source: (Www150.statcan.gc.ca 2022)

Table shows the percentage change of transfers to households from 2019 to 2020 to be 51.56% and 2020 to 2021 at -30.80%.

Table 3 Percentage change in Transfer to households

The percentage change in bonds are given in the table. We find from 2019 to 2020 there has been an increase of 127.63% while from 2020 to 2021 there has been an increase of 97.35%.

Table 4 Percentage change of total bonds

References

Www150.statcan.gc.ca, 2022. Bank of Canada, assets and liabilities, at month-end. [online] Www150.statcan.gc.ca. Available at: <https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1010010801&cubeTimeFrame.startMonth=01&cubeTimeFrame.startYear=2019&cubeTimeFrame.endMonth=11&cubeTimeFrame.endYear=2021&referencePeriods=20190101%2C20211101> [Accessed 26 January 2022].

Www150.statcan.gc.ca, 2022. Revenue, expenditure and budgetary balance - General governments. [online] Www150.statcan.gc.ca. Available at:

<https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610047701&pickMembers%5B0%5D=2.1&pickMembers%5B1%5D=3.1&cubeTimeFrame.startMonth=01&cubeTimeFrame.startYear=2020&cubeTimeFrame.endMonth=10&cubeTimeFrame.endYear=2021&referencePeriods=20200101%2C20211001> [Accessed 26 January 2022].