Consider the following data (in billion $) for a country in a particular year: (assume this country has Zero Transfer Payment Personal consumption expenditure (C) 200 Exports (x) 10 Government Purchases of goods and services (G) 120 Imports (m) 15 Gross Domestic Product (Y) 1800 Taxes 20 g.      Dose the government has deficit, balance or surplus budget? h.      What is the amount of investment financed by national saving? i.       What is the amount of investment financed by borrowing from rest of the

Q: Show the solution. Suppose GDP equals $30 trillion, consumption equals $20 trillion, the government…

A: Given  GDP = $30 trillion.  Consumption = $20 trillion.  Government spending = $4 trillion.  Budget…

Q: Question 3. Suppose that an economy can be described by the following equations: Y=C+I+ G, Y=5,000,…

A: *Answer :-

Q: Suppose a closed economy has gross domestic product (GDP) of $10,000, Taxes of $3,000, Consumption…

A: National savings refer to the sum of private and public savings. When taxes exceed government…

Q: Consider an economy described by the following equations: Y = C + I + G Y = 5,000 G = 1,000 T =…

A: Given: Y = 5,000G = 1,000T = 1,000C = 250 + 0.75(Y −T )I = 1,000 − 50 r.

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

A: It is given that the budget deficit is $50 Billion and the government will recover it by borrowing…

Q: 60. Suppose that in a closed economy GDP is $10,000, consumption is $6,500, and taxes are $2,000.…

A: Gross Domestic Product is the value of all final goods and services produced in an economy over a…

Q: As a result of this policy, the equilibrium interest rate    .   Which of the following statements…

A: In economics, the aforeknown term is associated with the debt incurred by a country's government to…

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

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

Q: Scenario 1: Suppose savers either buy bonds or make deposits in savings accounts at banks.…

A: Investment is the source of demand for loanable funds. Saving is the source of supply of loanable…

Q: are $1800 million, gross investment is $450 million, imports are $350 million, exports are $180…

A: Given : Consumption expenditures =$1800 million, Gross investment =$450 million, Imports =$350…

Q: Question 15 Scenario 21-1 Consider the following data for a closed economy, assuming no interest…

A: Given; Y= $12 trillion C= $8 trillion I= $2 trillion G= $2 trillion Transfers= $2 trillion Taxes= $3…

Q: 4. Consider the long-run theory of investment, saving, and growth. Which of the following statements…

A: In the long term, a rise within the demand for investment pushes up the charge per unit and…

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: A national newspaper’s headline reads “Business Confidence Reaches Highest Level in 5 Years.” (a)…

A: In economics, the loanable funds notion is a market interest rate theory. According to this…

Q: 42. Suppose a closed economy had public saving of −$6 trillion and private saving of $15 trillion.…

A: National Savings is the sum of public as well as private savings.  Given : Public Saving = -$6…

Q: 13) Which of the following is NOT an implication of Ricardian equivalence? a) Tax cuts have no…

A: 13) Which of the following is NOT an implication of Ricardian equivalence? The answer is - d) The…

Q: Scenario 1: Suppose savers either buy bonds or make deposits in savings accounts at banks.…

A: ANSWER   (1) (a) Lower tax on interest income will increase savings, increasing the supply of…

Q: Q. Suppose GDP equals $10 trillion, consumption equals $6.5 trillion the government spends $2…

A: Given: Y= 10.0, C= 6.5, G= 2.0, G– T= 0.3 Public saving = T– G = – 0.3

Q: Suppose GDP in this country is $480 million.  National Income Account Value (Millions of dollars)…

A: We have, GDP = $480; The government purchase = $150; The taxes minus transfer payments = $180;…

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: Consider an economy in which GDP is $30 billion. Tax revenue is $7 billion, consumption is $15…

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

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: Assume that in this economy consumption (C) is given by the equation C = 600 + 0.6(Y – T).…

A: Suppose we denote Y as the GDP assuming Y = 8000. Given information: C = 600 + 0.6(Y – T) equation I…

Q: Suppose GDP is $8 trillion, taxes are $1.5 trillion, private savings is $0.5 trillion, and public…

A: GDP means gross domestic product which can be calculated using value added method, income method and…

Q: Suppose that GDP is $8 billion, taxes are $1.5 billion, private saving is $0.5 billion, and public…

A: In a closed economy, GDP is the sum of consumption expenditure, investment spending, government…

Q: Consider the following data (in billion $) for a country in a particular year: (assume this country…

A: It is common to include GDP as part of a government subsidy or lifestyle in a country. When…

Q: A national newspaper's headline reads "Business Confidence Reaches Highest Level in 5 Years." (a)…

A: a) If the business confidence increases, they want to invest in new projects and assets and for…

Q: Scenario 1: Suppose savers either buy bonds or make deposits in savings accounts at banks.…

A: Investment is the source of demand for loanable funds and savings is the source of supply of…

Q: 1. Suppose you are given the following data: Government Purchases $ 6.0 billion Imports $ 0.3…

A: here we calculate the government public savings and value of household private savings by using the…

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: 1. Suppose GDP is $8 trillion, taxes are $1.5 trillion, private saving is $0.5 trillion, and public…

A: We are going to find the National savings, investment and consumption expenditure using economic…

Q: Suppose real GDP is $6,182 billion, taxes collected by the government are $719 billion, government…

A: Given  Real GDP (Y) = $6,182 billion Tax (T) = $719 billion  Government Spending (G) = $820 billion…

Q: Suppose GDP is $8 trillion, taxes are $1.5 trillion, private saving is $0.5 trillion, and public…

A: The closed economy is autonomous, ensuring that no shipments reach the nation and no shipments…

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: Suppose that taxes increase and money supply increases in such a way that output does not change.…

A: Increase in money supply increases aggregate demand and increase in taxes decreases aggregate…

Q: Suppose GDP is $8 trillion, taxes are $1.5 trillion,private saving is $0.5 trillion, and public…

A: National income is the total market value of all final goods and services produced in an economy…

Q: Scenario 1: Suppose savers either buy bonds or make deposits in savings accounts at banks.…

A: Scenario 1:  At first, the interest income acquired or deposits are taxed at 20%. Presently guess…

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.