2. Show that in an open economy private saving has to be allocated between investment, government debt and purchases of wealth from foreigners.
That is, show that S = I + CA + (G T
As per National Income Identity:
Y = (C - T) + I + G + X - M
Y = C - T + I + G + X - M
(Y - C) = I + (X - M) + (G - T)
S = I + CA + (G - T), since CA = X - M
2. Show that in an open economy private saving has to be allocated between investment, government...
37. In a small open economy, if domestic saving exceeds domestic investment, then the extra saving will be used to: A) make loans to the government. B) make loans to foreigners. C repay the national debt. D) repay loans to the Bank of Canada.
2. Saving and investment in the national income accounts The following table contains data for a hypothetical closed economy that uses the dollar as its currency. Suppose GDP in this country is $1,230 million. Enter the amount for government purchases. National Income Account Value (Millions of dollars) Government Purchases (GG) Taxes minus Transfer Payments (TT) 210 Consumption (CC) 600 Investment (II) 330 Complete the following table by using national income accounting identities to calculate national saving. In your calculations, use...
4) Calculate the values for government purchases (G), private domestic saving (S), and private domestic investment (1) from the following information (all variables are in billions of dollars). National income Disposable income Consumption Budget Deficit Net Exports Y = 5,200 YD = 4,400 C = 4,100 BD = 150 NX = 110
In a closed economy, private saving is equal to which of the following? (Y = GDP, C = Consumption, G-Government purchases, T = Taxes, and TR-Transfers)
2. Suppose GDP of a closed economy is $10 billion, consumption is $7 billion, private saving is $1 billion and public saving is $0.2 billion. Calculate taxes, government purchases, national saving and investment.
19 is the first paragraph Another economy has private saving given by: Sv 300+5r, and gross investment is given by the equation I = 1200-Sr. Gross tax revenue is 500; government purchases are 300; and net tax revenue is 100. This country is lending 200 internationally. What is the equilibrium real rate of interest? What is the value for transfer payments, T, in #197
Full Question: Options for the drop downs: Attempts: Average: 15 2. Saving and investment in the national income accounts The following table contains data for a hypothetical closed economy that uses the dollar as its currency. Suppose GDP in this country is $780 million. Enter the amount for government purchases. Value (Millions of dollars) National Income Account 260 Government Purchases (G) Taxes minus Transfer Payments (T) Consumption (C) Investment (1) 300 280 Complete the following table by using national income...
In an open economy, the government deficit is 600 and saving exceeds investment by 500, so in equilibrium the trade deficit (IM − X) must be a. 100. b. 700. c. 200. d. 300.
Suppose an economy has a private domestic savings of $444 billion, a government deficit of $210 billion, and private domestic investment of $400 billion. How much is the trade deficit (in billions of dollars)? Recall the savings investment formula: S + (M – X) = I + (G - T)
7. If at some interest rate desired investment is $400 billion, desired private saving is $600 billion, and the budget deficit is $300 billion, is there a surplus or a shortage in the market for loanable funds? What does this imply would happen to interest rates? 8. In a closed economy, GDP is $1000, government purchases are $200, and consumption is $700. If the government has a budget surplus of $25, what are investment, taxes, private saving, public saving and...