Q. 1: Consider an economy described as follows: Y = C + I + G Y= 8000 G = 2500 T = 2000 C = 1000 + 2/3 (Y – T) I = 1200 – 100r a. Compute public savings, private savings and national savings for this economy. b. Find the equilibrium interest rate. c. Now, suppose that T increased by 500, compute public savings, private savings and national savings for this economy. d. What happens to new equilibrium interest rate.

Q: Question 1 Given the following on a closed economy. Question 2 C = 40 + 0.8Yd I = 55 – 200r G = 20…

A: Since you have asked multiple subparts we would answer the first three for you. To get the answers…

Q: compute the value of consumption (C), private saving, public saving, and national saving. Also, find…

A:

Q: On the following graph, plot the relationship between the real interest rate and net capital outflow…

A: The value of a country's exports minus the value of its imports over a specific time period is known…

Q: Jobu is thinking about borrowing $10,000 from Mike. He promises Mike cash flows (a stream of…

A: In finance, the net present worth or net present worth applies to a progression of incomes happening…

Q: Which of the following best describes the catch-up effect?   Question 14 options:   It is easier for…

A: Catch-up effect says that all countries will converge to their steady state level of income per…

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 − 50r C = 250 + 0.75(Y - 1000) C =…

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

A:

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: 1. Consider an economy described as follows: Y = C+I+ G. Y = 8,000. G= 2,500. T= 2,000. C = 1000 +…

A: Public saving and government expenditure are negatively related to each other. It means as…

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

A: Given that, GDP = $8billion  Taxes = $1.5 billion  Private saving = $0.5 billion  Public saving =…

Q: Savings S = 150 Investment I  = 100 Taxes T = 250 Government Purchases G = 500   Compute the…

A: The sum of business and household savings is called private savings. Public savings refers to the…

Q: Which of the following is not correct? Question 3 options:   By saving a larger portion of its…

A: option c is  is not correct  financial intrementis not are only type of financial institutions…

Q: Soon after his election in 1992, President Clinton proposed reducing government spending and…

A: 1) President Clinton proposed reducing government spending and increasing taxes which will reduce…

Q: In a given year, a country's GDP = $9,841, net factor payments from abroad = $889, taxes = $869,…

A: Public savings plus private savings make up national savings. It represents the domestic supply of…

Q: For the next three questions, consider a closed economy with the following information: Economic…

A: A.Public savings=Tax revenue-Government spending Overall taxes is the tax revenue=10,000 Government…

Q: Explain how changes in interest rates and rates of return on various investment options will affect…

A: Explain how changes in interest rates and rates of return on various investment options will affect…

Q: Savings, Investment, and Deficits Suppose a country has a closed economy, and at first it has the…

A: Real GDP (Y) = 800 Consumption (C) = 560 Government Spending (G) =120 C =c0  + C1(Y-T) Given the…

Q: Please answer part 4 only  Suppose a government decides to pass a tax cut, while keeping the level…

A: Aggregate demand refers to the amount of the sales proceeds which an entrepreneur actually expects…

Q: Compute Public savings, taxes, private saving, national saving, and investment based on the…

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

Q: QUESTION 4 Neverland is a closed economy that severed all links to the outside world. Its economy…

A:

Q: Assume that GDP (Y) is 8,000, which is also the full employment level of real GDP. Consumption (C)…

A: a) Consumption = 800 + 0.8 (8000 -1000) = 800 +0.8 (7000) = $6400 b) y =C+I + G 8000 = 800 + 5600 +…

Q: Consider a closed economy without a government. If the GDP of the economy is $63,000 and the…

A: Equilibrium without government is at Y= C + I Y= income  C= consumption  I= investment

Q: The following table contains data for a hypothetical closed economy that uses the dollar as its…

A: GDP is the sum of consumption, investment and government spending in a closed economy.

Q: Recently, a legislator proposes to raise the expenditure on infrastructure. How would this affect…

A: Usually when government decides to increase its spending, it has a direct effect on the loanable…

Q: In a closed economy, savings, and investments are interacted/coordinated. 1. Who are savers and…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: For a closed economy, T = $5,000; S = $11,000; C = $50,000; and the government is running a budget…

A: GDP is the "total value" of all services and goods in the economy produced in a particular time…

Q: Consider a closed economy without a government. If the GDP of the economy is $63,000 and the…

A: When the economy is closed and there is no government, then GDP = C + I Where C is consumption and I…

Q: In an economy the interest rate is 5% and the depreciation rate is 20%. The price of capital is 1. A…

A: Given that; Production Function : Y = A K0.5N0.5 Let the cost of capital be (r)  & Cost of…

Q: Assume that the economy can be modeled as follows: AE = C + I + G C = 300 + .6Yd I = 400 G = 100…

A: Note:- Since we can only answer up to three subparts, we'll answer the first three. Please repost…

Q: Given the following on a closed economy. C = 40 + 0.8Y a I= 55 – 200, C= consumption I= Investment G…

A: [As per answering policy, only 1st 3 parts can be answered, so you've to post rest 3 parts in…

Q: The Economist article, "Low interest rates leave savers with few good options", states that savers…

A: Poeple save money for different reasons. Savings allow people to meet future expenses. Setting cash…

Q: Consider country D, which is a closed economy. Suppose that D’s investment is 100, disposable income…

A: In a closed economy, the national income identity is: Y= C+I+G I= Y-C-G (In a closed economy…

Q: Consider an economy described by the following equations: Y = C + I + G Y = 6100 G = 1100 T = 1100 C…

A: new equilibrium interest rate can be defined as as the rate at which the quantity of money demanded…

Q: Consider an economy described by the following equations:                                     Y=C +…

A:

Q: Consider an economy described as tollows: Y-C+1+ G. Y = 8,000. G = 2,500. 1 = 2,000. C = 1000 +…

A: a) Private saving is calculated by subtracting only consumption spending from disposable income.…

Q: Consider a closed economy without a government. If the GDP of the economy is $25,000 and the saving…

A: Aggregate savings refer to the income that is left after consumption. S = Y - C

Q: Based on the Ricardian Equivalence, explain the impact of the debt-financed tax cut on public…

A: Ricardian equivalence suggests that households are forward-looking and are able to perfectly…

Q: Suppose a government decides to pass a tax cut, while keeping the level of government spending the…

A: Note: As per the guidelines we will answer only three subparts. Please resubmit the question again…

Q: Briefly explain the role played by banks between savers and borrowers and the economic benefit, if…

A: Banks provide savings to depositors by providing them with saving rate and borrowers borrow money at…

Q: Briefly explain how an increase in interest rates affects consumer spending. investment spending,…

A: The increase in interest rates is a monetary policy instrument implemented by the central bank. It…

Q: Consider an economy described by the following equations: Y=C + I +G Y=7,000 G=4000 T=2,000…

A: given data Y=7000 G=4000 T=2000 C=150+0.75(Y-T) I=1000-50r now G is rising by 1000.

Q: Economists in Funlandia, a closed economy, have collected the following information about the…

A: We have the following information- Closed economy Y = 10,000 C = 6,000 T = 1,500 G = 1,700 I =…

Q: Consider the following information on aggregate income, consumption expenditure, and planned…

A: Formulas: 1. Saving (S) = Income (Y) - Consumption(C) 2. MPC = ∆C/∆Y 3. MPC + MPS = 1

Q: Refer to Table 8.7. Planned saving equals planned investment at an aggregate output level

A: Planned saving can be calculated as follows:

Q: U(c1, C2, C3, C4, . ...) = In(c1) + Bln(c2) + B² In(c3)+.... Assume that Peter can borrow or lend at…

A: Answer: We can not tell anything about his consumption because we have not been given any…

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.