Assume that GDP (Y) IS 5,000. Consumption (C) is given by the equation C-1,200+0.5(Y-T)-50r, where r...
Assume that GDP (Y) IS 5,000. Consumption (C) is given by the equation C-1,200+0.5(Y-T)-50r, where r is the real interest rate in percentage. Investment (I) is given by the equation I=1,500-50r. Taxes (T) are 1,200 and government spending (G) is 1,500.
1) What are the equilibrium values of C, I, and r?
2) What are the values of private saving, public saving, and national saving?
Homework Answers
![In Equilibrium Y = c+Ith y = 1200 +08 (Y-T) - Sopot isoo - SOP + 1 Soo y = 4200 tos [y - 1200] -100 P y = 4200 toisy - 600 -](http://img.homeworklib.com/questions/d0d02e20-7403-11ea-8ad7-87375f716ac3.png?x-oss-process=image/resize,w_560)
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Assume that GDP (Y) IS 5,000. Consumption (C) is given by the
equation C-1,200+0.5(Y-T)-50r, where r...
4. (12 points) Assume that GDP (Y) is 5000. Consumption (C) is given by the equation...
4. (12 points) Assume that GDP (Y) is 5000. Consumption (C) is given by the equation C = 1200 + 0.3(Y – T) – 50r, where r is the real interest rate, in percent. Investment (I) is given by the equation I = 1500 – 50r. Taxes (T) are 1000, and government spending (G) is 1500. (a) What are the equilibrium values of C, I, and r? Show your work! (Hint: You need to use 3 equations in order to...
Short Answer Questions 1 Assume thatGDP (nis 6,000. Consumption (C) isgiven by the equation d=600 T)....
Short Answer Questions 1 Assume thatGDP (nis 6,000. Consumption (C) isgiven by the equation d=600 T). Investment rhisgi +0.60 equation / 2,000- 100r, where r is the real rate of interest in percent. Taxes (T) are 500 and government spending G) is also 500. a. What are the equilibrium values of C, I, and r? b. What are the values of private saving, public saving, and national saving? c. If government spending rises to 1,000, what are the new equilibrium...
19. Suppose that GDP (Y) is 5,000. Consumption is given by the consumption function C =...
19. Suppose that GDP (Y) is 5,000. Consumption is given by the consumption function C = 500 + 0.5(Y – T). Investment (I) is given by the investment function I = 2,000 – 100r, where r is the real interest rate in percent. Government spending (G) is 1,000 and net taxes (T) is also 1,000. When an increase in business optimism boosts the investment function to I = 3,000 – 100r: a. I rises by 1,000 and r rises by...
Question 1. Consider a closed economy to which the Keynesian-cross analysis applies. Consumption is given by...
Question 1. Consider 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. (18 points) a. If Y is 1,500, what is planned spending? Should equilibrium Y be higher or lower than 1,500? (4 points) b. 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...
2. The country, Hoosier (a closed economy), has the following data: GDP: Y = 1200, Consumption:...
2. The country, Hoosier (a closed economy), has the following data: GDP: Y = 1200, Consumption: C = 600 – 10,000 r, Taxes: T = 200, Government purchases: G = 300. The investment is I = 700 – 10,000 r a. Use the information above to find the supply and demand equations for loanable funds: i. Supply equation: ii. Demand equation: _ b. What is the equilibrium interest rate, r, and what are national saving and investment, S and I?...
Assume that C Co + c(Y – T) and I = Io – i(r). Suppose that...
Assume that C Co + c(Y – T) and I = Io – i(r). Suppose that taxes increase and money supply increases in such a way that output is constant in equilibrium (assume c < 1 ). These policy changes will produce: An increase in investment and a decrease in private saving. An increase in investment and a decrease in private consumption. An increase in investment and a decrease in government spending. O A decrease in investment and an increase...
1. If disposable income is 4,000, consumption is 3,500, government spending is 1,000, and taxes minus...
1. If disposable income is 4,000, consumption is 3,500, government spending is 1,000, and taxes minus transfers are 800, national saving is equal to: a. 300. b. 500. c. 700. d. 1,000. 2. Assume that equilibrium GDP (Y) is 5,000. Consumption (C) is given by the equation C= 500 + 0.6Y. Investment (I) is given by the equation I= 2,000 – 100r, where r is the real interest rate in percent. No government exists. In this case, the equilibrium real...
In a given economy, consumption is given by C = 1000 + * (Y – T)...
In a given economy, consumption is given by C = 1000 + * (Y – T) If the real GDP is 9,606 and taxes and government spending are 2,408 each, what is national savings? Give your answer as a whole number.
2. The country, Hoosier (a closed economy), has the following data: GDP: Y = 1200, Consumption:...
2. The country, Hoosier (a closed economy), has the following data: GDP: Y = 1200, Consumption: C=600 - 10,000 r, Taxes: T = 200, Government purchases: G=300. The investment is I = 700 - 10,000 a. Use the information above to find the supply and demand equations for loanable funds: (i) Supply equation: 360 + 10,000+ sex theri um ii. Demand equation: 300 - 10.000 equat to b. What is the equilibrium interest rate, r, and what are national saving...
Y=C+I+G.Y=8,000.G=2,500.T=2,000.C=1,000+2/3 (Y-T).I=1,200-100 r. = C+I+G = 8,000. G = 2,500. T = 2,000. C = 1,000+2/3...
Y=C+I+G.Y=8,000.G=2,500.T=2,000.C=1,000+2/3 (Y-T).I=1,200-100 r. = C+I+G = 8,000. G = 2,500. T = 2,000. C = 1,000+2/3 (Y – T'). I = 1,200 - 100 r. a. In this economy, compute private saving, public saving, and national saving. b. Find the equilibrium interest rate. C. Now suppose that G is reduced by 500. Compute private saving, public saving, and national saving. d. Find the new equilibrium interest rate.
4. (12 points) Assume that GDP (Y) is 5000. Consumption (C) is given by the equation C = 1200 + 0.3(Y – T) – 50r, where r is the real interest rate, in percent. Investment (I) is given by the equation I = 1500 – 50r. Taxes (T) are 1000, and government spending (G) is 1500. (a) What are the equilibrium values of C, I, and r? Show your work! (Hint: You need to use 3 equations in order to...
Short Answer Questions 1 Assume thatGDP (nis 6,000. Consumption (C) isgiven by the equation d=600 T). Investment rhisgi +0.60 equation / 2,000- 100r, where r is the real rate of interest in percent. Taxes (T) are 500 and government spending G) is also 500. a. What are the equilibrium values of C, I, and r? b. What are the values of private saving, public saving, and national saving? c. If government spending rises to 1,000, what are the new equilibrium...
Question 1. Consider 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. (18 points) a. If Y is 1,500, what is planned spending? Should equilibrium Y be higher or lower than 1,500? (4 points) b. 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...
2. The country, Hoosier (a closed economy), has the following data: GDP: Y = 1200, Consumption: C = 600 – 10,000 r, Taxes: T = 200, Government purchases: G = 300. The investment is I = 700 – 10,000 r a. Use the information above to find the supply and demand equations for loanable funds: i. Supply equation: ii. Demand equation: _ b. What is the equilibrium interest rate, r, and what are national saving and investment, S and I?...
Assume that C Co + c(Y – T) and I = Io – i(r). Suppose that taxes increase and money supply increases in such a way that output is constant in equilibrium (assume c < 1 ). These policy changes will produce: An increase in investment and a decrease in private saving. An increase in investment and a decrease in private consumption. An increase in investment and a decrease in government spending. O A decrease in investment and an increase...
In a given economy, consumption is given by C = 1000 + * (Y – T) If the real GDP is 9,606 and taxes and government spending are 2,408 each, what is national savings? Give your answer as a whole number.
2. The country, Hoosier (a closed economy), has the following data: GDP: Y = 1200, Consumption: C=600 - 10,000 r, Taxes: T = 200, Government purchases: G=300. The investment is I = 700 - 10,000 a. Use the information above to find the supply and demand equations for loanable funds: (i) Supply equation: 360 + 10,000+ sex theri um ii. Demand equation: 300 - 10.000 equat to b. What is the equilibrium interest rate, r, and what are national saving...
Y=C+I+G.Y=8,000.G=2,500.T=2,000.C=1,000+2/3 (Y-T).I=1,200-100 r. = C+I+G = 8,000. G = 2,500. T = 2,000. C = 1,000+2/3 (Y – T'). I = 1,200 - 100 r. a. In this economy, compute private saving, public saving, and national saving. b. Find the equilibrium interest rate. C. Now suppose that G is reduced by 500. Compute private saving, public saving, and national saving. d. Find the new equilibrium interest rate.
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