Economics (6th Edition)
6th Edition
ISBN: 9780134105956
Author: Hubbard
Publisher: PEARSON
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Question
Chapter 21, Problem 21.2.8PA
Sub part (a):
To determine
The calculation of private saving for a closed economy.
Sub part (b):
To determine
The calculation of investment spending for a closed economy.
Sub part (c):
To determine
The calculation of transfer payment for a closed economy.
Sub part (d):
To determine
The calculation of government budget for a closed economy.
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Q2.In each of the following, calculate private, public and national savings and the national savings rate.
Given that:
Household savings = 200
Business savings = 400
Government purchases = 100
Government transfers = 100
Tax collections = 150
Gross Domestic Product = 2,200
Consider a closed economy without a government. If the GDP of the economy is $63,000 and the consumption in the economy is $45,000, the saving rate in the economy is ________.
86 percent
24 percent
57 percent
75 percent
Is a family a household? Is a household a family?
Which sector (Households, Businesses, or International) spends the most? Which sector spends the least? Which sector, because of its volatility, has an importance greater than is warranted by its size?
What does it mean if net exports are negative?
People sometimes argue that imports should be limited by government policy. Suppose a government quota on the quantity of sugar to be imported to the United States occurs. What is likely to happen to the price of sugar in the United States and in the rest of the world?
List the four sectors of the economy along with the type of spending associated with each sector. Order the types of spending in terms of magnitude, and give an example of each kind of spending.
Using the interconnection between sectors of the economy, explain the effects of imposing an increase in taxes on the household sector.
Chapter 21 Solutions
Economics (6th Edition)
Ch. 21 - Prob. 21.1.1RQCh. 21 - Prob. 21.1.2RQCh. 21 - Prob. 21.1.3RQCh. 21 - Prob. 21.1.4RQCh. 21 - Prob. 21.1.5PACh. 21 - Prob. 21.1.6PACh. 21 - Prob. 21.1.7PACh. 21 - Prob. 21.1.8PACh. 21 - Prob. 21.1.9PACh. 21 - Prob. 21.1.10PA
Ch. 21 - Prob. 21.1.11PACh. 21 - Prob. 21.1.12PACh. 21 - Prob. 21.1.13PACh. 21 - Prob. 21.1.14PACh. 21 - Prob. 21.2.1RQCh. 21 - Prob. 21.2.2RQCh. 21 - Prob. 21.2.3RQCh. 21 - Prob. 21.2.4RQCh. 21 - Prob. 21.2.5PACh. 21 - Prob. 21.2.6PACh. 21 - Prob. 21.2.7PACh. 21 - Prob. 21.2.8PACh. 21 - Prob. 21.2.9PACh. 21 - Prob. 21.2.10PACh. 21 - Prob. 21.2.11PACh. 21 - Prob. 21.2.12PACh. 21 - Prob. 21.2.13PACh. 21 - Prob. 21.2.14PACh. 21 - Prob. 21.2.15PACh. 21 - Prob. 21.2.16PACh. 21 - Prob. 21.2.17PACh. 21 - Prob. 21.3.1RQCh. 21 - Prob. 21.3.2RQCh. 21 - Prob. 21.3.3RQCh. 21 - Prob. 21.3.4PACh. 21 - Prob. 21.3.5PACh. 21 - Prob. 21.3.6PACh. 21 - Prob. 21.3.7PACh. 21 - Prob. 21.3.8PACh. 21 - Prob. 21.3.9PACh. 21 - Prob. 21.3.10PACh. 21 - Prob. 21.1RDECh. 21 - Prob. 21.2RDECh. 21 - Prob. 21.3RDE
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- Given the following on a closed economy, determine the following The level of Private savings The level of Public savings The level of national savingarrow_forwardConsider a closed economy in which total output equals $13,000. The economy also has the following information: Consumption totals $6500 Government spending totals $2500 Private savings totals $3800 Carefully following all numeric instructions, tell me this economy's net taxes (T). Carefully following all numeric instructions, tell me this economy's public savings. Carefully following all numeric instructions, tell me this economy's economic investment.arrow_forwarddetermine the following The level of Private savings The level of Public savings The level of national savingsarrow_forward
- 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 Calculate private savings.arrow_forwardThe following are national income account data for a hypothetical economy in billions of dollars: gross private domestic investment ($320), imports ($35), exports ($22), personal consumption expenditures $2460, and government purchases ($470). What is the Net Export in this economy?arrow_forwardBased on the data in the table and graph below, identify the equilibrium GDP: Price Level Real GDP/Output in $ billion Real GDP/Spending in $ billion 80 100 180 90 120 160 100 140 140 110 160 125 120 170 115 130 175 105 140 178 100arrow_forward
- Disposable income is defined as national income - transfers + taxes. national income + transfers + taxes. national income - transfers - taxes. national income + transfers - taxes.arrow_forwardSuppose real GDP is $5,361 billion, taxes collected by the government are $528 billion, government spending is $669 billion, and consumption spending is $3,797 billion. If the economy is closed, what is the value of investment spending? Enter a whole number with no dollar sign and please do not include the word billion.arrow_forwardShow how a GH¢2,000 increase in government spending financed by a GH¢2,000 increase in taxes will affect the level of national income.arrow_forward
- A country’s private consumption is 30, government spending is 7, investment is 5, net factor income from abroad is 2, GDP is 45. The country’s gross national disposable income is 46. the country’s gross national income is 47. the gross national expenditure is 42 and the Current account is 4. The country sent abroad 2 and received 1 of unilateral transfers. The rest of the world claims 100 of debt from the country above. This is a stock variable. The country lends at 4% and borrows at 3%. These are rates of change of stocks. Use this information combined with one of the flow variables describing the country’s international transactions to find the stock of what the world owes this country. Note: no workers worked across the border. No wages flowed in, none flowed out. Is the country from the previous question rich or poor? Does it enjoy the exorbitant privilege? In what important way is this country’s stock and flow of investment different from the US?arrow_forwardIn the small closed economy of Bonretia, the currency is the denar. Statistics for last year show that private saving was 50 billion denars, taxes were 40 billion denars, government purchases of goods and services were 30 billion denars, there were 20 billion denars in transfer payments by the government, and GDP was 70 billion denars. What were consumption and investment in San Bonretia? Please read carefully before solvearrow_forward
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