20. Consider the market for financial capital in the long run. The national saving curve is upward sloping because an increase in the real interest rate leads households to increase their current consumption. decreases the supply of private saving. leads to an increase in investment demand. decreases the supply of public saving. leads households to reduce their current consumption.

Q: B. Suppose the government borrows $20 billion more next year than this year. a. Use a…

A: a) The demand and supply of loanable funds is shown below Given that the government would borrow…

Q: - Consider an economy described by the following equations: Y = C +1 + G AND, Y = 20,000; G = 4,000;…

A: Given Information : Y= C+I+G Y=20,000 C=1000+0.8(Y-T) I=2500-120r G=4000 T=4000

Q: assume an economy in which: (i) there are no exports and no imports, (ii) investors always want to…

A: Answer: Given, Net exportNX=Export-Import=0-0=0InvestmentI=$200 billionGovernment expenditureG=$500…

Q: 3.3 How does classical economic theory respond to the claim that saving contradicts Say's Law, i.e.,…

A: The say's law is very well known as the counterbalancing forces of demand and supply which act both…

Q: According to the supply and demand model for saving, in a closed economy, an increase in the…

A: There exists equality between savings (S) and investment (I) In classical macroeconomic models. It…

Q: Suppose that in a closed economy GDP is equal to $33,000, consumption equal to $18,000, government…

A: Given; GDP in a closed economy=$33000  Consumption= $18000 Government purchases= $6500 Taxes= $6750…

Q: 3.3 How does classical economic theory respond to the claim that saving contradicts Say's Law, i.e.,…

A: The classical economists believe that economy is in equilibrium and full employment is general…

Q: Question 5 Suppose GDP is RM8 billion, taxes are RM1.5 billion, and public saving is RM0.2 billion.…

A: Given, GDP = RM8 billion Taxes = RM1.5 billion Public savings = RM0.2 billion i) Consumption = GDP -…

Q: Refer to Table 25-3. What is the level of private saving for this economy?     $2000     $500…

A: The equation for the aggregate output(Y) in the economy is Y=C+I+G(Y-C-T)+(T-G)=I Y: Aggregate…

Q: If the following policies were implemented, how would it affect the market for loanable funds,…

A: In both graphs, D0 and S0 are initial demand and supply curves for loanable funds, intersecting at…

Q: -Explain how a consumption tax could lead to a decrease in real interest rates.

A: Consumption is the share of income that consumer spends and not save. The income of a consumer is…

Q: 6. In macroeconomist mind, Explain how they are able to distinguish the terms between investment and…

A: Stock is the ownership certificate of any company owned by shareholders.

Q: c. Show that the real interest rate determined in part a sets national saving equal to planned…

A: Note: assuming that the green tick is for the correct answer in parts a and b.  The real interest…

Q: 2. Suppose the government borrows $20 billion more next year than this year. a. Use a…

A: Suppose the government borrows $20 billion more this year, a) The demand and supply curve can be…

Q: 5. A higher interest rate makes _____ more attractive. Therefore the quantity of loanable funds…

A: Since you asked multiple questions, we will solve the first question for you. If you want any…

Q: A closed economy has income Y of 1200, consumption C of 800, government purchases G of 200, and…

A: The total income or GDP for a closed economy is the sum of consumption, investment and government…

Q: 13. Which of the four government policies to stimulate saving is essential? That is, which policy…

A: 13 Government policy changes are frequently influenced by economic situations. Government policy,…

Q: In which of the following situations is it most advantageous to be saving? Select one: A. The real…

A: Inflation is basically an increase in the value of commodities and services over a certain period of…

Q: Consumption expendi ture: Investment expenditure: Government budget balance Money demand C=100+0.8…

A: Private saving = Income - Consumption - TaxesPrivate saving = Y - C - T

Q: EqUil rate= 17% , borrowing by 171 million at old interest rate 15%. compared to value 151 million…

A: Government deficit is referred to be a situation whereby the government expenses are more than its…

Q: 8. Suppose the government borrow $20 billion more next year than this year. Use a supply-and demand…

A: If the government borrow $20 billion more next year than this year it means government is running a…

Q: GDP $7.3 trillion Consumer Spending $5.2 trillion Taxes Minus Transfers $1.1 trillion Government…

A: Private savings can be defined as what the economy saves in an accounting year. Private savings can…

Q: Question 3. Suppose that Y=C + 1+ G in a closed economy and GDP (Y) is 6,000. Consumption (C) is…

A: * SOLUTION :-  * 3)

Q: 22. Assume the US is operating in a closed economy and GDP is $20 trillion, consumption is $8…

A: a) "A balanced budget in this economy imply that government spending equates the tax revenue which…

Q: The table sets out the data for an economy when the government's budget is balanced. Calculate the…

A: Equilibrium real interest rate is at a point where loanable funds demanded is equal to supplied. At…

Q: Suppose real GDP is $5,042 billion, taxes collected by the government are $534 billion, government…

A: The policy of the government regarding taxation and government expenditure is known as the fiscal…

Q: Based on the Ricardian Equivalence, explain the impact of the debt-financed tax cut on public…

A: Ricardian equivalence suggests that households are forward-looking and are able to perfectly…

Q: Assume that the economy is described by the following equations: Y=C+l+G, Y=8490, G-2719, T=2056,…

A: We have been given in the question that:- Y=8490 G=2719 T=2056 C=258+1/2(Y-T) I=400+40r Please find…

Q: uppose, the government of Australia incurs a budget deficit of $50 billion due to increased…

A: Given; Budget deficit = $50 billion When the savings done by the government is negative, it is said…

Q: Economics The table shows an economy's demand for loanable funds schedule and supply of loanable…

A: The Ricardo-Barro effect, also known as Ricardo Equivalence, is an economic theory that pinpoints…

Q: Attached Question :

A: Government: It refers to the people who are in power and have the responsibility of the country. The…

Q: Suppose GDP in this country is $1,540 million. Enter the amount for government purchases. National…

A: GDP is the value of all final goods and services produced in an economy over a given period of time.…

Q: Assume that the stock market experiences a massive rally, leading to a significant increase in…

A: Meaning of Goods Market: The term goods market refers to the situation under which the…

Q: 2. Please use the loanable funds model to analyze the effects of a government budget deficit (you…

A: Since there are multiple questions posted, and gives priority to the second question, we will…

Q: 34. The table below shows aggregate values for a hypothetical economy. Suppose this economy has real…

A: 34. The table below shows aggregate values for a hypothetical economy. Suppose this economy has real…

Q: c. Find the equilibrium interest rate r and the associated level of investment spending. Note that…

A: The equilibrium interest rate is the rate at which the quantity of money demanded is equal to the…

Q: 4. Suppose gross saving in the United States is 20 percent of Gross National Product (GNP). a. If…

A: National saving = Public saving + Private saving.

Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.