Answered: Explain the difference between saving…

Business

Economics

Explain the difference between saving and investment as defined by a macroeconomist. c. Which of the following

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 3PA

See similar textbooks

Related questions

Q: To make policy choices that involve gainers and losers, we need to have a restricted principle for…

A: Real economic policy decisions, in reality, benefit some individuals while affecting others.…

Q: Approximately __________ million Americans are without health insurance.

A: Health Insurance is one of the most useful thing. It helps in ensuring to cover all the medical…

Q: the equilibrium quantity demanded for fhnancial capital by 10 2.51% of GDP. Show the effect this…

A: Investment definition is a resource gained or put resources into to create financial wellbeing and…

Q: 1) Maximize following equation: w (x,y,) =-3x2+30x-6y2 Subject to x+y=5 2) Find dP/dQ P=5Q+Q2…

A: To maximize we set the lagrangian as..

Q: D7) Some economists argue that it is possible to raise the standard of living by reducing population…

Q: a profitabilty index (PI) of 1.45 indcates the project generates S0.45 of internal rate of return…

A: The profitability index is defined as a measure of the attractiveness of a project or investment. It…

Q: In the Aggregate Demand and Aggregate Supply model, an increase in consumer confidence will: O…

A: Aggregate demand curve slopes downward, it shows an inverse relationship between price level and…

Q: CPI Table: Year 2015 2016 2017 2018 CPI 92 100 109 135 A a pair of jeans costs $90 in 2015. What is…

A: CPI (2015) = [cost of basket (2015)/cost of basket at base]*100

Q: Discuss the ways a college degree a form of capital.

A: A college diploma is a type of capital because it will potentially help you acquire a better-paying…

Q: MARR (Minimum acceptable rate of return) is 12% per year while the re-investment rate is 10% per…

A: A hurdle rate, which is also known as the minimum acceptable rate of return (MARR), is the minimum…

Q: how do i show this answer in two seperate graphs? Or is the one graph showing both parts of the…

A: The situation can be represented through one graph only.

Q: A Park charges $50 for students and $100 for everyone else. If the price elasticity of demand for…

A: Elasticity of demand is defined as type responsiveness of the quantity demand when price of the…

Q: PLEASE HELP Question 20 If a pharmaceutical firm's patent expires and more firms enter its market…

A: The markets are the place where the buyers and the sellers operate with each other. The demand side…

Q: total of Php 5,000 is invested at a simple interest rate of 6% for 4 months. How much interest is…

Q: At a recent boat show, Nautica Bank was offering add-on interest installment boat loans for up to 5…

Q: According to John Rawls, the welfare of society only depends on the welfare of the ------------…

A: When talking about the theory of John Rawls on the social welfare, it can be said that he beleives…

Q: We learned that in a competitive market equilibrium the Marginal Cost equals the Price, as Marginal…

A: Monopoly is a form of market structure in which a single firm sells a commodity for which there are…

Q: The world today is facing several energy challenges that are of concern to economists and…

A: The energy crisis is the fear that the world's demands on the limited natural resources required to…

Q: Explain why the aggregate short-run aggregate supply curve is upward sloping?

A: Three points of theory that explain why short-term aggregate-supply curve upwàrd sloping show…

Q: Suppose i = 4%, i* = 2%, and that the domestic currency is expected to depreciate by 3% during the…

A: Given that i=4%, and i*=2% and domestic currency depreciate by 3%. Now in order to determine which…

Q: B SRAS, A SRASO SRAS2 E AD Y Y 1. Assume that the economy starts at point A and there is a drought…

A: The number of goods and services supplied by the sellers in an economy is termed supply. There…

Q: LATHE A 40,000 5,000 2,000 LATHE B 56,000 7,000 2,800 3.5 12 0.25 First Cost Salvage Value Annual…

A: Annual worth method is referred to as the equivalent uniform annual worth calculated for all the…

Q: Start Up! These people are thinking of things that they want to buy. Draw or identify the things…

A: According to the question, there is a group of four people who are thinking of things that they want…

Q: If society values a more equal distribution of goods which is embodied in Social Indifference…

A: When talking about social indifference curve, it is the curve that represents the combination of…

Q: In the IS-LM model, what is the effect of an increase in government purchases? Draw an IS-LM diagram…

A: IS curve depicts the locus of all the points where the goods market is in equilibrium . IS relation…

Q: rian uses wool (K) and labour (L) to produce t-shirts (q). The production function is: q =…

A: q = min{1/3L, 2K}. Brian uses 1 kg of wool and 3 hours of labor to produce 1 t-shirt

Q: The demand for soft drinks is given by the equation: Q = 100 − 2P where P pence is the price per can…

A: Revenue is maximised at a point where marginal revenue is equal to 0. Marginal revenue is calculated…

Q: If interest rates increase in financial markets, then...

A: Interest rates are defined as the charges taken by the lenders for the money lent ti the borrower.…

Q: A certain warehouse is worth P1,650,000. The average value of the merchandise in the warehouse is…

A: Cost of insurance Annually :- Warehouse. = 1% of 1,650,000 = 16500 Merchandise. = 0.9% of…

Q: 1. Suppose that the economy can be described by the following equations: C = 400 + (8/9)*DI I= 300…

A: Initially, the economy was described in the following set of equation:…

Q: Which of the following statements describes Principle 6: Markets are usually a good way to organize…

A: A market refers to the platform or a place for the people to interact with each other for making an…

Q: what specific educational reforms should be made to ensure that the poor and middle-income students…

A: As we all know that "Education is the only weapon for all types of problem of a nation". Still this…

Q: Discuss the first and second fundamental theory of Welfare Economics.

A: Welfare economics is basically a branch of economics that use micro-economic approaches to assess…

Q: -------- depends only on the utility levels of the households. fill in the blank

A: The consumption function shows the positive relationship between the income and consumption of goods…

Q: 2. In 1964 the United States banned television advertising of cigarettes. Is it possible that the…

A: Total revenue refers to the sum total of all the prices of the goods and services that a firm sells…

Q: Compare and contrast the Mundell-Fleming model with the monetary model of exchange rate…

A: Mundell fleming model is the monetary approach of "balance of payments". this model is concerned…

Q: Give an example of "diseconomies of scale" and describe how this diseconomy could arise.

A: Diseconomies of scale occurs where an increase in the production level causes rise in the cost of…

Q: Discuss how the demand and supply for a particular product/s have changed in the last 2-3 years.…

A: Movement along the existing demand curve is referred to as a change in the quantity demanded. This…

Q: business takes out a simple interest loan of Php 100,000 at a rate of 7.5%. What is the total amount…

A: SI(simple interest) is calculated as (P×r×t)/100. Amount is the sum of P and SI Where P is the…

Q: At the beginning of the year 2021, three friends, Ebo, Michael and Joseph decided to set up a…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Along any given IS curve: a. government spending is fixed, but tax rates vary. b. tax rates are…

A: IS-LM stands for "investment savings-liquidity preference-money supply," or "investment…

Q: Aluminum can be used to produce cable (buyers have elastic demand) or to make aircraft (inelastic…

A: In order to prevent re-sales, the firm should integrate with vertical industries which have higher…

Q: 4. Here is the expression for money market equilibrium that we discussed in class: M = P. L(Y,r +…

A: Money Market Equilibrium : Money Supply = Money Demand M/P = L(Y , r + pie ) Growth rate expression…

Q: 6. Suppose we have a sample average X = 0.75 with standard error oz = 0.33. What is the 95%…

A: Z values for 5% and 2.5% are 1.45 and 1.960 respectively.

Q: Eccles Incorporated (based in Ogden) manufactures precision steel sprockets for applications…

Q: Why does the country’s population continue to increase (in number) despite government’s efforts to…

A: Population basically refers to the total number of people living in a nation, city, or territory.A…

Q: If you were a Chinese exporter, what might you have done if you had anticipated the appreciation in…

A: The basic function of the foreign exchange market is to facilitate the conversion of 1 currency into…

Q: Do women earn less money than men and, if so, why?

A: Meaning of Macroeconomics: The term macroeconomics refers to the situation of economic and…

Q: 4. Describe two aspects of a market that make it easier for firms to collude and two aspects that…

A: Firms is a gievn market collude to get more profits or to reduce the losses. There are some aspects…

Q: Workers Total Total Cost Hired Output $20 40 $40 3 80 $60 120 $90 10 160 $130 15 200 $180 21 240…

A: Total Cost refers to the sum of the costs of all the goods and services that are produced by a firm.…

Question

b. Explain the difference between saving and investment as defined by a macroeconomist.
c. Which of the following situations in c (i) & c (ii) represent investment? Saving? Explain
(i) Your family takes out a mortgage and buys a new house.
(ii) You use your paycheque to buy stock in Sagicor Financial Services.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Which of the following situations represents investment? Saving? ExplainYour family takes out a mortgage and buys a new house. You use your paycheque to buy stock in Sagicor Financial Services.
Explain the difference between saving and investment as defined by a macroeconomist. Which of the following situations represent investment and which represent saving? Explain.a. Your family takes out a mortgage and buys a new house.You use your $200 paycheck to buy stock in Africel.Your roommate earns $100 and deposits it in his account at a bank.You borrow $1,000 from a bank to buy a car to use in your pizza delivery business.The interest rate is 7 percent. Use the concept of present value to compare $200 to be received in 10 years and $300 to be received in 20 years.A company has an investment project that would cost $10 million today and yield a payoff of $15 million in 4 years.Should the firm undertake the project if the interest rate is 11 percent? 10 percent? 9 percent? 8 percent?Can you figure out the exact cutoff for the interest rate between profitability and nonprofitability?
Suppose that GDP is $8 billion, taxes are $1.5 billion, private saving is $0.5 billion, and public saving is 0.2 billion. Assuming the economy is closed, calculate the size of:(i) Consumption (ii) Investment (iii) Government Spending (iv) National Savings b. Explain the difference between saving and investment as defined by a macroeconomist. c. Which of the following situations in c (i) & c (ii) represent investment? Saving? Explain(i) Your family takes out a mortgage and buys a new house. (ii) You use your paycheque to buy stock in Sagicor Financial Services.
Explain the difference between saving andinvestment as defined by a macroeconomist. Whichof the following situations represent investment andwhich represent saving? Explain.a. Your family takes out a mortgage and buys a newhouse.b. You use your $200 paycheck to buy stock in AT&T.c. Your roommate earns $100 and deposits it in hisaccount at a bank.d. You borrow $1,000 from a bank to buy a car to usein your pizza delivery business.
Explain how higher saving leads to a higher standardof living. What might deter a policymaker fromtrying to raise the rate of saving?
Explain THREE (3) factors that can influence investment in an economy.
Given that the individual is a saver, show the impact of:i) An increase in interest rate on Current and future consumption levels when SE > IEii) A decrease in interest rate on Current and future consumption levels when SE < IE
Draw a savings and investment graph. Explain the logic of why investment slopes down and savings slopes up.
During his first term, President Obama has increased government spending and cut taxes. For each variable state if it will INCREASE, DECREASE, or REMAIN UNCHANGED. In at least one complete sentence state WHY this change will occur. Be specific. Private Saving (Sp): Consumption: (C) Government Saving (Sg) Total Saving: (S) Real Interest Rates: (r) Investment: (I)