Assignment 1ECN 600 Assignment- Due Feuary 6, 2022 at 11:59 PM...

Question

Assignment 1ECN 600 Assignment- Due Feuary 6, 2022 at 11:59 PM —————————————————————————————————————————— Question 1 (30 marks) Download GDP data and real gross domestic investment from Statistics Canada for the period 1997 to most recent available data. Compute and graph investment as a percentage of GDP for each year. Comment on what happened to investment over that period.  Question 2 (30 marks) If Ricardian equivalence would hold, government debt would be ielevant. In the theoretical model analyzed in class, Ricardian equivalence theorem holds under strong assumptions which do not apply to real world.  Download quarterly general government debt data (Table: XXXXXXXXXX, first row in the table) from 1997 to 2019 from Statistics Canada webpage.  a) Graph the data against time. (10 marks)  ) Compute the debt as a percentage of GDP (use the GDP data from Question 1). Graph this variable against time. (10 marks)  c) How debt to GDP ratio has evolved in Canada over this period? (5 marks)  d) In your opinion, are these findings problematic? (5 marks)  Question XXXXXXXXXXmarks) Consider two consumers A and B both follow the two-period  model of consumption. A earns $100 in the first period and $100 in the second period. B earns nothing in the first period and $210 in the second period. Both of them can boow or lend at the interest rate r. a. You observe both A and B consuming $100 in the first period and $100 in the second period. What is the interest rate r? . Suppose that the interest rate increases. What will happen to A’s consumption in the first period? Is A better off or worse off than before the interest rate rise? c. What will happen to B’s consumption in the first period when the interest rate increases? Is B better off or worse off than before the interest rate increase? Question XXXXXXXXXXmarks) In lecture we consider a case in which the consumer can save or boow at an interest rate of r and for the case in which the consumer can save at this rate but cannot boow at all. Consider now the intermediate case in which the consumer can save at rate  and boow at rate , where . a) What is the consumer’s budget constraint in the case in which she consumes more than her income in period one? Answer in the form of an equation. )  What is the consumer’s budget constraint in the case in which she consumes more than her income in period one? Answer in the form of an equation. c) On a single graph, show the two budget constraints from parts (a) and (b). Shade the area that represents the combination of first-period and second-period consumption the consumer can choose. d) Now add to your graph the consumer’s indifference curves. Show three possible outcomes: one in which the consumer saves, one in which she boows, and one in which she neither saves nor boows. e) What determines first-period consumption in each of the three cases?s rs  https:www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid= XXXXXXXXXXhttps:www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid= XXXXXXXXXXEither of these 2 links can be used for GDP for Q1 https:www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid= XXXXXXXXXXhttps:www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid= XXXXXXXXXXhowever, the expert has to aslo find the data for investment of canada, in order to complete the Q1and this is the link for Q2, all other instructions are mentioned in the assignemnt pape

Komalavalli · Accepted Answer

Sheet1
	year	GDPI	GDP	GDPI as % of GDP
	1997	246,221	933745184781	0.000026
	1998	254,185	959857765528	0.000026
	1999	267,227	997968751447	0.000027
	2000	280,764	1047046486898	0.000027
	2001	294,296	1061763014138	0.000028
	2002	297,229	1098098096475	0.000027
	2003	312,737	1139947604898	0.000027
	2004	339,117	1184565482256	0.000029
	2005	370,058	1243744725655	0.000030
	2006	393,297	1295556862674	0.000030
	2007	405,755	1384543596092	0.000029
	2008	412,355	1398494571594	0.000029
	2009	365,701	1357541054226	0.000027
	2010	407,799	1399482212059	0.000029
	2011	426,710	1443522257095	0.000030
	2012	447,559	1468960331816	0.000030
	2013	454,044	1503174217512	0.000030
	2014	464,261	1546315859832	0.000030
	2015	440,073	1556508816217	0.000028
	2016	419,594	1572095608555	0.000027
	2017	433,636	1619885432082	0.000027
	2018	444,564	1659241318826	0.000027
	2019	444,491	1690126691915	0.000026
	2020	431,853	1600331194689	0.000027
GDPI as % of GDP	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2.6369185513678605E-5	2.6481527693864811E-5	2.6777090927195838E-5	2.6814855263183667E-5	2.7717672972327766E-5	2.7067618180385655E-5	2.743433107417989E-5	2.8627965703859163E-5	2.9753533210364535E-5	3.0357370743899279E-5	2.9306047216238227E-5	2.9485634651403099E-5	2.6938485496366395E-5	2.9139277118793373E-5	2.9560333961085499E-5	3.0467739006034686E-5	3.0205680400207262E-5	3.002368481498749E-5	2.8273081104001138E-5	2.6690106995831005E-5	2.676954748847602E-5	2.6793209339469708E-5	2.6299271062124047E-5	2.6985226647656318E-5	
Debt
		Debt	Gross domestic product at market prices	Debt as % of GDP
	Q1 1997	1,131,076	891,748	126.8380753307
	Q2 1997	1,128,659	899,412	125.4885414026
	Q3 1997	1,124,080	912,564	123.1782099666
	Q4 1997	1,130,775	923,980	122.3808956904
	Q1 1998	1,151,431	934,612	123.1988247529
	Q2 1998	1,146,424	935,212	122.5843979761
	Q3 1998	1,140,128	938,872	121.435935889
	Q4 1998	1,153,255	953,496	120.950166545
	Q1 1999	1,177,351	975,240	120.7242319839
	Q2 1999	1,172,353	994,172	117.9225526368
	Q3 1999	1,173,106	1,021,308	114.8630971264
	Q4 1999	1,183,186	1,040,988	113.6599077031
	Q1 2000	1,195,272	1,070,188	111.6880398584
	Q2 2000	1,193,666	1,099,448	108.5695730949
	Q3 2000	1,186,441	1,121,768	105.765274103
	Q4 2000	1,190,287	1,132,880	105.0673504696
	Q1 2001	1,215,862	1,149,924	105.7341180808
	Q2 2001	1,192,992	1,152,860	103.4810818313
	Q3 2001	1,216,049	1,138,804	106.782993386
	Q4 2001	1,221,090	1,136,584	107.4350861881
	Q1 2002	1,238,844	1,158,640	106.9222536767
	Q2 2002	1,232,543	1,185,892	103.9338320859
	Q3 2002	1,238,265	1,204,144	102.8336311936
	Q4 2002	1,242,629	1,226,100	101.3480955876
	Q1 2003	1,249,282	1,250,088	99.9355245391
	Q2 2003	1,237,134	1,237,720	99.9526548816
	Q3 2003	1,246,898	1,258,296	99.0941718006
	Q4 2003	1,254,243	1,272,884	98.535530339
	Q1 2004	1,277,170	1,296,216	98.5306461269
	Q2 2004	1,289,170	1,328,148	97.0652367055
	Q3 2004	1,275,706	1,351,480	94.3932577619
	Q4 2004	1,279,444	1,367,080	93.5895485268
	Q1 2005	1,315,095	1,380,324	95.2743703652
	Q2 2005	1,319,047	1,399,608	94.2440311859
	Q3 2005	1,328,036	1,436,992	92.4177726807
	Q4 2005	1,336,404	1,469,436	90.9467305823
	Q1 2006	1,356,097	1,476,000	91.8764905149
	Q2 2006	1,345,350	1,490,716	90.2485785354
	Q3 2006	1,346,

Assignment 1 ECN 600 Assignment- Due February 6, 2022 at 11:59 PM —————————————————————————————————————————— Question 1 (30 marks) Download GDP data and real gross domestic investment from Statistics...

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