true or false and provide a reason to support it, please quickly thanks !!! Q9.Keynes believed that saving is less responsive to changes in income than to changes interest rates
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true or false and provide a reason to support it, please quickly thanks !!!
Q9.Keynes believed that saving is less responsive to changes in income than to changes interest rates
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- Why will a reduction in the real interest rate increase investment spending, other things equal? Why is investment spending unstable?I need help to complete below homework: Q-3) Consider a closed classical economy where the government increases taxes by $800million. If the marginal propensity to consume is 0.75, describe what happens to thefollowing. Please be sure to indicate the magnitude of any change . (a) Public saving (b) Private saving (c) National saving (d) InvestmentHello . Can you please assist with the following queston below Q.1 State the three possible relationships between production, income andspending in macroeconomic theory. Q.2 Explain the relationship between consumption and saving in the Keynesian model.
- Consider a frugal closed economy without money market. Assume there is no government or exports/imports. The economy is described by the following set of equations. C =1000+0.5⋅Y ID = 600 1. What is the marginal propensity to save of this economy? a) 0.4 b) 0.5 c) 0.1 d) 0.3 e) 0.2 Currently, the economy is saving a half of the amount it consumes. The level of unplanned inventory change is [0, 600, 200, 1400 , 2000 ] and the economy is [equilllibrium or not at equillibrium,]This discussion is a continuation of the concept that in the goods market savings is equal to investment. This is known as the (IS) relation.The IS relation is true under a closed economy. However, the story is different under the circumstances where the economy is under recession and characterized by high unemployment. Hayek and Keynes who are notable in this field have different view on the role of savings specially public savings. The criticism of Keynes where he said the infamous line "in the long run we are all dead" pertains to the paradox of savings. Discussion Questions Describe the paradox of savings.This discussion is a continuation of the concept that in the goods market savings is equal to investment. This is known as the (IS) relation.The IS relation is true under a closed economy. However, the story is different under the circumstances where the economy is under recession and characterized by high unemployment. Hayek and Keynes who are notable in this field have different view on the role of savings specially public savings. The criticism of Keynes where he said the infamous line "in the long run we are all dead" pertains to the paradox of savings. Discussion Questions: When do savings become a positive virtue and when does it become bad for the economy?
- Economists in Pakland, a closed economy, have collected the following information about the economy for a particular year: Y = Rs.10,500 C = Rs.6,000 T = Rs.1,500 G = Rs.1,700 The economists also estimate that the investment function is: I = 3,300 - 100r Where, r is the country’s real interest rate, expressed as a percentage. Calculate: Private savingBlank 1(Write Only numbers in the blank. Do not write plus signs, minus signs, commas, full stops, currency etc.)Public savingBlank 2(Write Only numbers in the blank. Do not write plus signs, minus signs, commas, full stops, currency etc.)National savingBlank 3(Write Only numbers in the blank. Do not write plus signs, minus signs, commas, full stops, currency etc.)InvestmentBlank 4The equilibrium real interest rateBlank 5(Write Only numbers in the blank. Do not write plus signs, minus signs, commas, full stops, currency etc.)If the government increases taxes to Rs.1,800, calculate private savingBlank 6((Write Only numbers in the…Suppose a government decides to pass a tax cut, while keeping the level of government spending the same. How can the government finance the tax cut? What is the impact of the tax cut on public saving? Will private saving be affected and, if so, how? If households save most of (but not all) the tax cut, how will this affect investment? How will this affect the equilibrium interest rate? and why?Economists in Funlandia, a closed economy, have collected the following information about the economy for a particular year: Y = 10,000 C = 6,000 T = 1,500 G = 1,700 The economists also estimate that the investment function is: I = 3,300 – 100 r, Where r is the country’s real interest rate, expressed as a percentage. Calculate private saving, public saving, national saving, investment, and the equilibrium real interest rate.
- onsider a closed economy to which the Keynesian-cross analysis applies. Consumption is given by the equation C = 200 + 2/3(Y – T). Planned investment is 300, as are government spending and taxes. What is equilibrium Y? (Hint: Substitute the values of equations for planned consumption, investment, and government spending into the equation Y = C + I + G and then solve for Y.) What are equilibrium consumption, private saving, public saving, and national saving?Discuss the topic in the Image based on the consumption theory choices that you can choose and discuss in detail with the topic in the Image:-Life Cycle Hypothesis-The Permanent Income Hypothesis-The Random-Walk Hypothesis-The Psychology of Instant Gratificatitaton-Keynes' theoryExplain 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?