The figure below shows national saving (NS) and investment demand (1D ) for the hypotheticalcountry of Slovappa. Real GDP is equal to potential GDP. The numbers are in billions of dollars.Assume the economy's national saving is NSo and investment is IDo-NSoNSQuantity ofInvestmentand Saving (S)Suppose that at this level of national saving, the government of Slovappa has a budget deficit of$100. If the country's level of national saving is $200, then private saving must be $a) 300b) 100c) 200Real Interest Rate

National savings is given as National savings= Private savings + government savings (Government…

and Saving (S) Suppose that at this level of national saving, the government of Slovappa has a budget deficit of $100. If the country's level of national saving is $200, then private saving must be $ a) 300 b) 100 c) 200

and Saving (S) Suppose that at this level of national saving, the government of Slovappa has a budget deficit of $100. If the country's level of national saving is $200, then private saving must be $ a) 300 b) 100 c) 200

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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Question

The figure below shows national saving (NS) and investment demand (1D ) for the hypothetical
country of Slovappa. Real GDP is equal to potential GDP. The numbers are in billions of dollars.
Assume the economy's national saving is NSo and investment is IDo-
NSo
NS
Quantity of
Investment
and Saving (S)
Suppose that at this level of national saving, the government of Slovappa has a budget deficit of
$100. If the country's level of national saving is $200, then private saving must be $
a) 300
b) 100
c) 200
Real Interest Rate

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