Question 3 Consider a closed economy described by the following equations: Y-C+1+G Y -5,000 G- 1,000...
Question 3 Consider a closed economy described by the following equations: Y=C+I+G Y-5,000 G 1,000 T= 1,000 C 250+0.75 (Y -T) 1,000-50 a. (3 points) In this economy, compute private saving, public saving, and national saving. b. (2 points) Find the equilibrium interest rate. c. (2 points) Draw a graph containing the saving and investment curves for this economy Show the financial market equilibrium. d. (2 points) Now suppose the G rises to 1,250. Compute private saving, public saving, and...
Consider an economy described as follows: Y = C + I + G Y = 8,000 G = 2,500 T = 2,000 C = 1,000 + 2/3(Y - T) I = 1,200 – 100r 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.
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.
How to solve this problem especially on the b and d this kind of graph question eclass.srv.ualberta.ca Question 2 (15 marks) Consider the following macroeconomic model that describes an Economy: - 1/2 Y =C+I+G Y = 5000 G = T = 1000 C = 250 +0.75(Y-T) 1 = 1000 - 50r a) Calculate the amount of private saving, public saving and the national saving in this economy. b) Calculate the equilibrium interest rate (r). c) Draw a graph containing the...
1. Given the following data, answer all questions Y 5000 G-1000 T 1000 C-250+0.75 (Y-T 1000-50 a. Calculate: Consumption Private Saving Public Saving- National Saving Investment- b. Calculate the equilibrium interest rate:r c. Assume G increases to 1,250. Calculate: Consumption Private Saving- Public Saving National Saving- d. Calculate the new equilibrium interest rate: Now open the economy to NX: NX 500-500 E Investment- e. Calculate: Consumption Private Saving = Public Saving- National Saving Investment- The trade balance- Equilibrium exchange rate-...
C. Consider an economy described by the following equations: Y = C+I+G+NX K = 2,500 40,000 = K0.5 0.5 = 2000 T = 2000 C = 600+.8 (Y-T) I = 2000 - 40r NX = 1000 - 400€ - 0.002Y T = r = 10 1. [4 points) What is the long-run level of output? 2. [7 points) What is the equilibrium value of the real exchange rate? 3. [9 points) What are the equilibrium values of national saving, investment...
21. G increase with algebra. Consider an economy described by the following model. Y = K1/3L2/3 K = 1000; L = 1000 G = 100 T = 100 C = 250 + 0.5(Y-T) 1 = 600 – 100r Calculate the equilibrium real interest rate, national saving, public saving, private saving, consumption, output, and investment. (Hint: you probably don't want to solve for them it in that order.) i.rs ii. national saving = iii. public saving = iv. private saving =...
Consider an economy in long run equilibrium described by the following equations: Y = C + I + G + NX Y = 5000 G = 1000 T = 1000 C = 250 + 0.75*( Y - T ) I = 1000 - 50*r NCO = 500 - 50*r Where r is the real interest rate (in % terms). Suppose G rises to 1250 without any change in T. Solve again for the equilibrium real interest rate and the rest...
Consider an open economy described by the following equations (all figures in millions of dollars): Y = C + I + G + NX Y = 8,000 (current value of output) G = 2,000 T = 1,000 + .1(Y) C = 450 + 0.75 (Y – T) I = 2,000 – 40 r NX = 700- 600ɛ (ɛ is the exchange rate) r = r* = 5 a) What is the current state of this economy in term of national...
An economy is described by the following equations: Y = C + I + G C = 0.75 YD + 20 T = 0.2 Y + 4 G = 20 I = 25 Calculate equilibrium output and equilibrium private and public saving. With how much does equilibrium output falls, if government reduces government expenditure with 1 unit? Explain the event in b) for the multiplier diagram