1. Consider an economy described as follows:Y = C +I+ G.Y = 8,000.G= 2,500.T= 2,000.C = 1000 + 2/3(Y-T).||I=1,200 - 150i.a. In this economy, compute private saving, public saving, and national saving.b. Find the equilibrium interest rate.c. Now suppose that G is reduced by 600. Compute private saving, public saving, andnational saving.d. Find the new equilibrium interest rate.

Public saving and government expenditure are negatively related to each other. It means as…

Answered: 1. Consider an economy described as…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Savings,investment And The Financial System

Section: Chapter Questions

Problem 5PA

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Consider an the following equations: Y=C + I +G Y=7,000 G=4000 T=2,000 C=150+0.75(Y-T) I=1,000-50r a. compute private saving, public saving and national saving. b. Calculate the equilibrium interest rate. c. Now suppose the G rises BY 1,000. Compute private saving, public saving, and national saving.
10. Work It Out. Consider an economy described as follows: Y = = Y G T 1 1 Cam C = I C+I+G 8,000 2,500 2,000 1000+2/3 (Y - T) 1,200 100 r. a. In this economy, compute private saving, public saving, and national saving. b. Find the equilibrium interest rate. c. Now suppose that G is reduced by 500. Compute private saving, public saving, and national saving. d. Find the new equilibrium interest rate.
Question 3. Suppose that an economy can be described by the following equations: Y=C+I+ G, Y=5,000, G= 1,000, T=1,000, C= 250 + 0.75(Y-T), I= 1,000 – 50r. a. In this economy, compute private saving, public saving, and national saving b. Find the equilibrium interest rate (measured in percentage points). c. Now suppose that G rises to 1,250. Compute private saving, public saving and national saving. d. Find the new equilibrium interest rate.
Consider an economy described by the following equations:Y=C + I +GY=7,000G=4000T=2,000C=150+0.75(Y-T)I=1,000-50ra. In this economy, compute private saving, public saving and national saving.b. Calculate the equilibrium interest rate.c. Now suppose the G rises by 1,000. Compute private saving, public saving, and nationalsaving.d. Calculate the new equilibrium interest rate. Answer only part c and d in this question as I have attempted first two parts already.
Consider an economy described by the following equations: Y = C + I + G AND, Y = 5,000; G = 1,000; T = 1,000; C = 250 + 0.75(Y − T); I = 1,000 − 50 r. a. In this economy, compute private saving, public saving, national saving and the equilibrium interest rate. b. If G rises to 1,250, Compute private saving, public saving, and national saving and the new equilibrium interest rate.
Consider an economy described by the following equations:Y = C + I + GY = 5,000G = 1,000T = 1,000C = 250 + 0.75(Y −T )I = 1,000 − 50 r.a. In this economy, compute private saving, public saving, and national saving. b. Find the equilibrium interest rate. c. Now suppose that G rises to 1,250. Compute private saving, public saving, and national saving.
8) Consider an economy described as follows: Y=C+l+G. Y=8,000 G=2,500. T=2,000. C=1,000+2/3(Y-T) |=1,200-100r a) In this economy, compute private saving, public saving, and national saving.
Consider an economy described as follows: Y - C+I+ G. Y = 8,000. G = 2,500. 1 = 2,000. C = 1000 + 2/3(Y-T). I= 1,200 – 100r. a. In this economy, compute private saving. public saving, and national saving. b. Find the equilibrium interest rate. c. Now suppose that G is reduced by 500. Compute private saving, public saving, and national saving. d. Find the new equilibrium interest rate.
6. An economy at equilibrium has Y = 1,200, S = 100, G = 100 and C = 800. Find the levelof public saving, (T – G), for this economy.
Suppose the economy is closed and consumption of $10,000, taxes are $2000 and government purchases are $3,000 and national saving is $1,500. (Given GDP=$14500, Public saving= -$1000, Private saving=$2500, Investment=$1500). So In the era of covid-19 pandemic, the producers were pessimistic about the returns of capital and reduced their investments. Use a well-labelled diagram of loanable funds market to illustrate and explain the impacts on the equilibrium interest rate and quantity of loanable funds.
Suppose that GDP is $8 billion, taxes are $1.5 billion, private saving is $0.5 billion, and public saving is 0.2 billion. Assuming the economy is closed, calculate the size of:(i) Consumption (ii) Investment (iii) Government Spending (iv) National Savings b. Explain the difference between saving and investment as defined by a macroeconomist. c. Which of the following situations in c (i) & c (ii) represent investment? Saving? Explain(i) Your family takes out a mortgage and buys a new house. (ii) You use your paycheque to buy stock in Sagicor Financial Services.

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