Describe the Investment Decision for a Simple Investment?

Q: Define the term Net Investment?

A: Investment: In economics, the term investment refers to the purchase of commodities that will be…

Q: Which of the following should NOT be considered as part of fixed investment? 1. Toyota buys a new…

A: According to the economist investment is such a concept which focuses on the goods production in…

Q: This person earns $1000 of income today and $2000 income next year. Point C represents his…

A: The budget constraint for a two-period consumption is : [Ct+Ct+1/rt+1]=[Yt+Yt+1/rt+1] Ct is the…

Q: What is investment? How is it related to national saving?

A: Investment refers to an action of purchasing assets or goods that are not consumed in the present…

Q: Looking at business fixed investment, elaborate on why investment is negatively related to the…

A: Investments are negatively related rate of interest.

Q: Some studies have found that saving is not very sensitive to the rate of return on saving. a.true…

A: Saving is a part of money income that is saved.  Saving = disposable income - consumption

Q: Explain the three main important properties of the saving function?

A: According to the given question Simply we know that the saving function denotes the actual…

Q: Equation for finding the steady state of equilibrium for investment

A: The Solow Growth Model is an exogenous economic growth model that examines changes in an economy's…

Q: "Capital is a flow and income is a stock" True/False

A: # If a quantity is being measured at a perticular point of time then it is stock and if a quantity…

Q: Define disposable income

A: Disposable income, otherwise called dispensable individual income (DPI), is the measure of cash that…

Q: What is the impact on the national saving rate if the consumption and government share each increase…

A: Answer in step 2.

Q: Describe nonsimple investment?

A: Non simple investment is a type of investment where more than one sign change occurs in the net cash…

Q: A friend asks you to explain the difference between saving and investment. Explain the difference.

A: The individuals and households earn income from various sources which is then used by them for…

Q: Why would planned investments might be different than actual investments? And what does it mean?

A: A planned investment is the total amount of money that a company or person plans to spend over a set…

Q: Describe the four measures taken for investment?

A: Investment refers to the addition or acquisition of assets with the goal of making income or profit.

Q: What is Capital expenditure?

A: Capital expenditure refers to expenditure made by the firms in tangible assets such as land,…

Q: What is the impact of a change in the savings rate on the output?

A: When savings rate increases (decreases), people increase (decrease) current saving and decrease…

Q: Explain how higher savings leads to a higher standard of living.

A: The savings is the money that people keep with them without spending for their consumption purpose.…

Q: Which type of investment is called a mixed investment?

A: Investment refers to the purchase of an asset that entails greater payoff in the form of increased…

Q: Use the two-period model from the Appendix to answer this question. Your current income is 30,000.…

A: Current period income (Y1) = 30000 Current period expenditure (C1) = 24000 next period income (Y2) =…

Q: Is the purchase of equipment or machinery a part of consumption or investment?

A: Economics is the study of how the scarce resources of society are exploited. Economics is a social…

Q: What is the relationship; remember how economist talk about relationships, between the level of…

A: The equilibrium of the national income including the real GDP and the price level would be…

Q: Why is savings equal to investment

A: Saving is the portion is income that is not used in consumption and thus does not include in income…

Q: Is the purchase of equipment or machinery a part of consumption or investment? Why?

A: The concept of allocation of money with having an expectation in the future of a positive return or…

Q: What is the break even investment

A: The relationship that exists between fixed costs, variable costs, and returns can be studied by…

Q: Suppose a handbill publisher can buy a new duplicating machine for $500 and the duplicator has a…

A: The expected rate of return r is calculated as follows: Return = expected Revenue - cost r =…

Q: Define the term short-term investments?

A: The investment is a practice of investing money with the expectation of some future benefit or…

Q: Define the term Return on Investment?

A: Return on investment measures the performance which is used to evaluate the efficiency of an…

Q: Define the term the concept of return on investment?

A: Return on investment measures the performance which is used to evaluate the efficiency of an…

Q: With the help of consumption function C=10+0.5Y, calculate savings at an income level of $500

A: The consumer spending depends upon various factors such as income level, interest rate, age,…

Q: Looking at business fixed investment, explain why investment is negatively related to the interest…

A: An asset or object purchased with the intention of producing income or appreciation is referred to…

Q: What is the result of investments?

A: The amount of products purchased or accumulated per unit of time that are not utilised at the…

Q: Find the saving when the income is 50 and consumption is 60

A: Actually in the question Income level is = 50 Consumption is stated as = 60 Savings needed = ?

Q: ______ Is that type of investment which is not affected by change in the level of output or income

A: According to the given question Investment is basically known as the item of the asset which goal in…

Q: Describe the simple investment?

A: Investment refers to buying financial assets like shares and bonds to earn interest rates. Rate of…

Q: real interest rate

A: The real interest rate depicts that interest rate which is adjusted to inflation rate, it does not…

Q: Explain Three ways that a reduced rate of interest influences real capital investment.

A: Answer - Need to find- Explain Three ways that a reduced rate of interest influences real capital…

Q: If the MPC is .75 and disposable income is $100, then

A: Marginal Propensity to Consume ( MPC) refers to the increment in one's consumption expenditure when…

Q: What is the relationship; remember how economist talk about relationships, between the level of…

A: Economics is the study of various economic relationships. Relationship means it shows the connection…

Q: This person earns $1000 of income today and $2000 income next year. Point C represents his…

A: Given, Current income : $1000.Future income :$2000.

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.