Savings/Investment in Class GDP = 10 Consumption = 7 Government Spending = 2 Private Savings = 1 Transfer Payments...
4. GDP 20 Consumption 13 Taxes-8 Transfer Pmts=4 Public Saving= -2 A) Calculate Private Saving, Government Spending, Investment and National Saving B) Is the Govt budget currently in surplus, deficit or balanced? C) Explain the role of Savings/Investment to long run growth. D) How is the Govt budget impacting the level of Investment?
MPC Spending Multiplier Change in income 100 20 0.99 0.95 0.6 0.5 Change in government spending $15 $100 -$400 $450 $1,500 $2,000 -$1,000 $900 2.5 2.0 4. Assume that the equilibrium in the loanable funds market is at interest rate of 1.25% and quantity of funds at $20 billion. Suppose the current government deficit is zero so government is not borrowing any money. a) Suppose now government increases spending by $2 billion and finances it entirely by borrowing. This deficit...
In a closed economy, private saving is smaller than investment if government spending exceeds tax revenue. Select one: True False If there is a surplus of loanable funds, then neither curve shifts, but the quantity of loanable funds supplied increases and the quantity demanded decreases as the interest rate rises to equilibrium. Select one: True False An increase in the budget deficit would cause a shortage of loanable funds at the original interest rate, which would lead to falling interest...
QUESTION 3 Tribons of dolers GDP Consumption Government spending Exports Imports Budget balance Given the values in the table, and assuming transfer payments trillion (Round to one decimal place.) , compute the value of private saving. Private saving QUESTION 4 Trons GDP Consumption Government pending Exports Imports Budget balance What is the value of national savings for the hypothetical economy whose data is given in the table? National Savings trillion.(Round to one decimal place.) 5 QUESTION 5 Tribons of dollars...
In a closed economy, the values for GDP, consumption spending, investment spending, transfer payments, and taxes are as follows: Y = $12 trillion C = $9 trillion I = $3 trillion TR = $2 trillion T = $3 trillion Using the information above, what is the value of private saving and public saving? A. Private saving equals $3 trillion and public saving equals $9 trillion. B.Private saving equals $1 trillion and public saving equals $2 trillion. C.Private saving equals $2...
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?...
13./The economy has GDP is Y - 160; Consumption is C = 120 - 500 r; Taxes are T = 10; and Government purchases are G = 20 Investment is I = 100 - 1500 r; a. Is there a budget deficit or surplus? (circle) How much is the budget or surplus? G-T: 20-10 10 spub=-10 G>T then deficit - b. What is the supply equation? What is the demand equation? Y-C-G = 160-190-soor-20 r-c-G Supply: 20-50or -(-6) Demand: 100-1500...
1. If an economy has a budget surplus of 400, private savings of 1,200, and investment of 1,600, what will the balance of trade in this economy equal? 2. If there is shortage of loanable funds, then what happens to the supply and demand for loanable funds? 3.Changing the level of government spending is an example of what kind of policy? 4.If inflation is expected, then the short-run aggregate supply curve is shaped how?
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...
Where Y is GDP, C is consumption, I is investment, G is government spending, and there is no international trade, national saving equals: A) Y – C – I. B) C + I + G. C) Y – C – G. D) Y + C + G.