Suppose the economy is four sectors economy. The economy is represented by the following: C = 400 + 0.40Yd G= 40 I= 25 T= 5 NX = - 25 where; C = Consumption G= Government Expenditure I = Investment T= Tax NX = Net Exports

Suppose the economy is four sectors economy. The economy is represented by the following: C = 400 + 0.40Yd G= 40 I= 25 T= 5 NX = - 25 where; C = Consumption G= Government Expenditure I = Investment T= Tax NX = Net Exports

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter4: The Aggregate Economy

Section: Chapter Questions

Problem 6E

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Concept explainers

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.

Question

From the information above, calculate the level of consumption and saving that occurs at the equilibrium level of income.

Suppose the economy is four sectors economy. The economy is represented by the following:
C = 400 + 0.40Yd
G= 40
I= 25
T= 5
NX = - 25
where;
C= Consumption
G= Government Expenditure
I= Investment
T= Tax
NX = Net Exports

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