One last time, please consider a closed economy with the following information: • Economic investment = $4500 • Private savings = $3000 Output (income) = $16,000 • Consumption = $11,000 ● This economy has no transfer payments; in other words, total taxes and "net taxes" are the same thing. Carefully following all numeric instructions, calculate this economy's

One last time, please consider a closed economy with the following information: • Economic investment = $4500 • Private savings = $3000 Output (income) = $16,000 • Consumption = $11,000 ● This economy has no transfer payments; in other words, total taxes and "net taxes" are the same thing. Carefully following all numeric instructions, calculate this economy's

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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tions gwep17t.09.024 O O Which of the following are leakages from the circular flow of income? a. Savings, taxes, and imports b. Investment, government purchases, and exports c. Investment, taxes and bonds d. Imports, wages and taxes Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.
“Crowding out” refers to the situation in whicha. borrowing by the federal government raisesinterest rates and causes firms to invest less.b. foreigners sell their bonds and purchase U.S.goods and services.c. borrowing by the federal government causesstate and local governments to lower theirtaxes.d. increased federal taxes to balance the budgetcause interest rates to increase and consumercredit to decrease.
By how much did the disposable income of rich people increase as a result of the 2017 drop in the top marginal tax rate from 39.6 percent to 37 percent? Assume rich people have $2 trillion of gross income in the highest bracket.
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 Assume that the government eliminates taxes while keeping governmentspending the same. (Thus T = 0 and G = 500.) The economy’s consumption function andinvestment remain unchanged. What is the new equilibrium level of national income?
For the next three questions, consider a closed economy with the following information: Economic investment = $6000 Private savings = $4100 Output (income) = $20,000 Consumption = $11,000 This economy has no transfer payments; in other words, total taxes and "net taxes" are the same thing. calculate this economy's government purchases (G). calculate this economy's public savings. calculate this economy's taxes (T). Note that there are no transfer payments.
Prove that Sp=B implies Y=C+G, where, Sp=Quantity of private savings B=Quantity of debt issued by the government in the current period Y=Aggregate income in the current period C=Aggregate Consumption in the current period G=Quantity of government purchases
1. In an economy, the output is 25, the consumption is 14, and the government spends six and collects 5. The net exports are positive 1 a. Find the private equilibrium savings. b. For the above question, find the volume of investment supplied. c. The firms' demand for funds equals their marginal product of capital function. We approximate it here as I = 5 - 40r Find the equilibrium interest rate on the loanable funds market, and report it here in decimals, not percentages. d. graph of the financial market equilibrium. Label axes, curves, and project on axes the values you found in the previous two questions. Comment on why the NX=1 has the effect on investment that it does. e. Now, the government deepens its budget deficit to G-T = 2. For simplicity, assume that output and savings don't react. Find the new quantity of investment supplied. f. Find the new equilibrium interest rate, and report it here in decimals. g. graph of the financial market comparative statics.…
Assume an economy with 1000 consumers. Each consumer has income in the current period of 50 units and future income of 60 units, and pays a lump-sum tax of 10 in the current period and 20 in the future period. The market real interest rate is 8%. Of the 1000 consumers, 500 consume 60 units in the future, while 500 consume 20 units in the future. Determine each consumer’s current consumption and current saving. Current Consumption: Current Saving: Determine aggregate private saving, aggregate consumption in each period, government spending in the current and future periods, the current-period government deficit, and the quantity of debt issued by the government in the current period. Aggregate Private Saving Aggregate Consumption Government spending: Current Future Current period government deficit Quantity of debt
20. At what level of income are the leakages from the spending stream equal to the injections into the spending stream? a) 4 b) 12 c) 24 d) 8 e) zero
The current market rate of interest is 10 percent. At that rate of interest, businesses borrow $300 billion per year for investment and consumers borrow $50 billion per year to finance purchases. The government is currently borrowing $150 billion per year to cover its budget deficit. a. Derive the market demand for loanable funds, and show how investors and consumerswill be affected if the budget deficit increases to $250 billion per year. Draw a graphto show your conclusion. b. Assuming taxpayers do not anticipate an increase in the future market rate of interestdue to the increase in budget deficit, show the impact of the increase in the budgetdeficit on the market for loanable funds. c. How would your conclusion differ if taxpayers fully anticipate future tax increases tooffset the increase in the budget deficit? d. Do you think the Ricardian Equivalence is realistic?
The current market rate of interest is 10 percent. At that rate of interest, businesses borrow $300 billion per year for investment and consumers borrow $50 billion per year to finance purchases. The government is currently borrowing $150 billion per year to cover its budget deficit. a. Derive the market demand for loanable funds, and show how investors and consumerswill be affected if the budget deficit increases to $250 billion per year. Draw a graphto show your conclusion. b. Assuming taxpayers do not anticipate an increase in the future market rate of interestdue to the increase in budget deficit, show the impact of the increase in the budget deficit on the market for loanable funds. c. How would your conclusion differ if taxpayers fully anticipate future tax increases to offset the increase in the budget deficit? d. Do you think the Ricardian Equivalence is realistic?
***PLEASE READ THE QUESTIONS CAREFULLY - PART B HAS MULTIPLE REQUIREMENTS*** Given: Barbara has an income of $2000 this year, and she expects an income of $1100 next year. She can borrow and lend money at an interest rate of 10%. Consumption goods cost $1 per unit this year and there is no inflation. a. What is the net present value of Barbara’s endowment? b. On a graph show the combinations of consumption this year andconsumption next year that she can afford. Label Barbara’s endowment with the letter E. Write down Barbara’s budget equation. What is the slope of Barbara’s budget line?