EBK ECONOMICS: PRINCIPLES AND POLICY
13th Edition
ISBN: 9780100605930
Author: Blinder
Publisher: YUZU
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Chapter 26.A, Problem 3TY
To determine
The equilibrium level of saving.
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Students have asked these similar questions
If consumers decide to increase saving, then C decreases, r decreases, I increases, and Y:
In the long run, what happens to consumption in the economy when people are saving less?
a) remains the same
b) cannot tell from the graph
c) decreases
d) increases
Classify each of the following based on the macroeconomic definitions of saving and investment.
Saving
Investment
Crystal borrows money to build a new lab for her engineering firm.
Hilary purchases stock in Pherk, a pharmaceutical company.
Edison takes out a mortgage for a new home in Detroit.
Brian purchases a corporate bond issued by a car company.
Chapter 26 Solutions
EBK ECONOMICS: PRINCIPLES AND POLICY
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Similar questions
- Agreement and disagreement among economists Suppose that Musashi, an economist from a business administration program in Georgia, and Rina, another economist from a nonprofit institution in the Midwest, are both guests on a popular science podcast. The host of the podcast is facilitating their debate over saving incentives. The following dialogue represents a portion of the transcript of their discussion: Rina: I think it's safe to say that, in general, the savings rate of households in today's economy is much lower than it really needs to be to sustain an improvement in living standards. Musashi: I think a switch from the income tax to a consumption tax would bring growth in living standards. Rina: You really think households would change their saving behavior enough in response to this to make a difference? Because I don't. The disagreement between these economists is most likely due to DIFFERENCES BETWEEN PERCEPTION VERSUS REALITY or DIFFERENCES IN SCIENTIFIC JUDGEMENTS…arrow_forwardExplain why the saving curve slopes upward and the investment curve slopes downward in the saving–investment diagram. Give two examples of changes that would shift the saving curve to the right, and two examples of changes that would shift the investment curve to the right. (Note: insert hand drawn picture(s) into the word file to explain your answer.)arrow_forwardWith the help of consumption function C=10+0.5Y, calculate savings at an income level of $500arrow_forward
- What is the difference between consumption and autonomous consumption?arrow_forwardConsumption function C = 32 +0.8 Y. a. Create saving function b. How much is consumption when saving = 0 c. How much income when the savings are 20arrow_forwardClassify each of the following scenarios listed in the table below using the macroeconomic definitions of saving and investment. Shen purchases a new townhouse in Hartford. Poornima borrows money to build an addition to a lab owned by her engineering firm. Manuel purchases a certificate of deposit at his bank. Valerie purchases stock in Tesqar, a biotech firm. Saving Investment Oarrow_forward
- Assume that the unintended investment is negative. Briefly outline how the level of Ye will change in response to this. how is the impact of change related to the size of the multiplier?arrow_forwardI consumed all my income at every level of income.Draw my consumption and saving function.What are my MPC and MPS? Explain why it must always be true that MPC+MPS equal to 1?arrow_forwardFind the disposable income when the consumption is $210 in the saving our $ 190arrow_forward
- Draw a diagram to describe this: Marginal consumption Cm decreases -> The amount of money consumed C also decreases => Household saving S (Saving) increases because S = Yd - C -> The supply of loanable funds increases (due to an increase in household savings) -> the lending interest rate decreases (in the condition that the demand for loan funds remains constant)arrow_forwardWhat does the consumption function showarrow_forwardWhich of the following will increase the slope of the demand curve in the goods market to indicate an increase in the level of output and income? Select one: a. An increase in autonomous investment. b. An increase in the marginal propensity to consume. c. An increase in government spending. d. An increase in taxation.arrow_forward
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