Savings, Investment, and the Financial System - End of Chapter Problems1. Given the following information about the closed economy of Brittania, what is the level of investment spending andprivate savings, and what is the budget balance? Assume there are no government transfers.GDP $1400.00 millionC $840.00 millionT $310.00 millionG $280.00 millionI- $millionPrivate savings $millionBudget balance $millionNational savings $million

Given – GDP = $1400M , T = $310M , C = $840M , G= $280M (M=million)For closed economy:GDP = C + I +…

Answered: Savings, Investment, and the Financial…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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 d. What is the value of gross investment? e. What is the value of net export? f. Is the country lending to or borrowing from rest of the world? 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 world? J. What is the meaning of transfer payment
onsider 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 d. What is the value of gross investment? e. What is the value of net export? f. Is the country lending to or borrowing from rest of the world? 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 world? J. What is the meaning of transfer payment
Dear Sir/Madam while studying for my macroeconomics course, I came across this case study that I am struggling with right now. Thank you for your help. Assume the economy is open to capital inflows and outflows and therefore net capital inflow equals imports (IM) minus exports (X). Calculate each of the following. a) X = $125 million IM = $80 million Budget balance = - $200 million I = $350 million Calculate private savings. b) X = $85 million IM = $135 million Budget balance = $100 million Private savings = $250 million Calculate I. c) X = $60 million IM = $95 million Private savings = $325 million I = $300 million Calculate the budget balance. d) Private savings = $325 million I = $400 million Budget balance = $10 million Calculate IM – X.
In the economy of Carpathia: Consumption =850 billion Government purchase of goods and services = 100 billion Import = 125 billion Investment spending= 75 billion Exports = 100 billion. Taxes= 50 billion —There are no government transfers payment. — set an open a close economy given the provided data table? —Compute the following based on the data in the table above. A) GDP in Carpathia B) National savings in Carpathia: C) Net capital inflow into Carpathia: D) The savings-investment spending identity for the Carpathian economy
Assume the economy is open to capital inflows and outflows and therefore net capital inflow equals imports (IM) minus exports (X). Answer each of the following questions. a) X = $60 millionIM = $95 millionPrivate savings = $325 millionI = $300 million Calculate the budget balance. b) Private savings = $325 millionI = $400 millionBudget balance = $10 million Calculate IM − X.
Answer a and b a) Discuss briefly the history, legislation, function, remittance of the CMBT (SPK). While writing your answer, focus on its mission and how the Board runs and what it does to achieve the mission.b) In a closed economy, savings and investments are interacted/coordinated. • Who are savers and investors in this closed economy? • How does financial (capital and money) market work? • How does crowding out happen? • Briefly discuss, by using I, S, G, T, X, M, how the scenario change when the economy is OPEN.
The following transactions took place in Ecoland in 2018: Trillions of 2014 dollars Government purchases 400 Taxes 360 Firms’ profits 300 Investment 400 Consumption expenditure 1000 Wages paid to labor 1400 Exports 300 Government transfer payments 150 Imports 350 (a). Calculate Ecoland’s real GDP in 2018, i.e., GDP measured in 2014 $. (b) How much do households save in Ecoland? Is it enough to finance domestic investment? (c) Does the government have a balanced budget? If not, what is the surplus or deficit? (d) If Ecoland’s nominal GDP in 2018 is $1900 trillion, how much inflation has Ecoland experienced since 2014?
China has seen a steep rise in total debt from 150% of GDP in 2008 to 250% today (the Economist, Nov. 15, 2018). Suppose the Chinese government addresses this with a package of spending cuts. (a1) What is the effect of China’s fiscal policy on the national saving rate? Use the Solow growth model to predict the effects on China’s steady-state income per capita. (a2) How does your answer change if the fiscal policy reduces government activities that have productivity effects? Please justify your answers along with drawing the graph of the Solow growth model.
In a closed economy, savings, and investments are interacted/coordinated. 1. Who are savers and investors in this closed economy? 2. How does financial(capital and money) market work? 3. How does crowding out happen? 4. Briefly discuss, by using I,S,G,T,X,M how the scenario change when the economy is open.
Suppose that we’re in an open economy with this situation: - C = $85.890 - I = $125.000 - G = $56.700 - X = $65.000 - M = $55.000 - T = $60.000 Calculate GDP, national saving, private saving, and public saving. Does it has budget deficit or budget surplus?
Using a correctly labeled loanable funds graph, show the effect of the contractionary fiscal policy decreasing government spending on real interest rates. Given the change in the real interest rate. What is the impact on each of the following? a. investment b. Economic growth rate. Explain. c. The international value of the dollar. Explain. Now assume instead that the government takes no policy action to fix the problem of the economy that is operating above full employment. In the long run, will the short-run aggregate supply increase, decrease, or remain unchanged? Explain.
For the first three questions, please consider a closed economy with the following information (and no transfer payments): Government purchases = $30,000Output (income) = $300,000Taxes = $20,000Total savings = $100,000Calculate this economy's public savings. Enter only numbers, a decimal point, and/or a negative sign as needed. Round your answer to two decimal places as necessary.

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