assume an economy in which: (i) there are no exports and no imports, (ii) investors always want to spend $200 billion, or I = 200, (iii) government spends $500 billion and tax revenue is $200 billion, (iv) consumption is a linear function of disposable income, C=100+0.8Yd At the equilibrium income level calculate private saving, and explain the relationship between private saving and planned investment?

Q: Given the following system of equations about the economy of Saudi Ariba : C = 30 + 0.5Yd |= 400 G =…

A: Given  C=30+0.5Yd           .. (1) I=400 G=500 T=200+0.3Y            ... (2)

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A: A) Net Tax is equal to taxes - transfers (Tx – Tr) = 200 - 100 = 100 It is given that the budget is…

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A: Private saving=consumption+-investment =10,000-300=97000

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A: 1. Government budget = Tax revenue – spending 2 Billion = 7 – spending Spending = 5 Billion $

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A: * SOLUTION :-  * 3)

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A:

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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.