Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506756
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter ST4, Problem 2CQ
To determine
Effect of savings to an economy.
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Is savings harmful or beneficial to the economy? Contrast the two views on this issue.
Differentiate between Classical and Keynesian Economists approach to savings.
Why is it incorrect/inappropriate to say that governments “invest” the “national savings?”
Chapter ST4 Solutions
Macroeconomics: Private and Public Choice (MindTap Course List)
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Similar questions
- how does distortion affects the financial and economic values of the tradable and non-tradable goodsarrow_forwardHow distortions affect the market of tradable and non-tradable goods and how it affects the financial and economic values of these goods?arrow_forwardpeople tend to spend more money when the economy experience aarrow_forward
- Could you say that the consumers are a significant aspect of an economy? If so, why?arrow_forwardSuppose people can consume the income they earn or save and invest it at rate ?. If we tax wealth at a rate greater than ?, how are people likely to adjust their rate of savings?arrow_forwardWill Increase in government spending financed by borrowing help promote a strong recovery from a severe recession? Why or why not?arrow_forward
- Discuss five ways which the country can do to increase its savings rate.arrow_forwardGive at least three examples of how savings can be channeled into productive investment. Why is investment so important for an economy? What do you sacrifice when you save today?arrow_forwardWhy does the budget require a forecast of the economy? Under what circumstances would actual government spending and tax revenue fall to match the budget as approved?arrow_forward
- Even during a financial recession, consumers tend to increase spending in _______arrow_forwardBriefly suggest Fiscal Policy or Monetary Policy Measures or Mix of Both to minimize the effects of this pandemic(covid-19) situationarrow_forwardIn the Savings-Investment model, what is the effect of an increase in government spending on investment? Why?arrow_forward
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