
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Consider an economy 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 − 50 r.
a. In this economy, compute private saving,
b. Find the equilibrium interest rate.
c. Now suppose that G rises to 1,250. Compute private saving, public saving, and national saving.
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