Problem 1 (10 marks) Suppose GDP equals $300 trillion, consumption equals $24 trillion, the government spends...
Problem 1 (10 marks)
Suppose GDP equals $300 trillion, consumption equals $24 trillion, the government spends $3 trillion and has a budget deficit of $500 billion.
- Find public saving, taxes, private saving, national saving, and investment.
Homework Answers
Answer
Taxes =govenmet spending -budget deficit
=3-0.5
=2.5 trillion
======
Pubcic saving =T-G=2.5-3=-0.5=-500 billion
===
Investment =Y-C-G=natioanl saving
=300-24-3
=273 trillion
====
Private saving =Y-T-C
=300-2.5-24
=273.5 trilion
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Problem 1 (10
marks)
Suppose GDP equals $300 trillion, consumption equals $24
trillion, the government spends...
Problem 1 (10 marks) Suppose GDP equals $300 trillion, consumption equals $24 trillion, the government spends...
Problem 1 (10 marks) Suppose GDP equals $300 trillion, consumption equals $24 trillion, the government spends $3 trillion and has a budget deficit of $500 billion. Find public saving, taxes, private saving, national saving, and investment. Problem 2 (10 marks) You take $500 that you held as currency and put it into the banking system. The reserve ratio is equal to 20%. Calculate the money multiplier. By how much will increase the total amount of deposits in the banking system?...
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