Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Economics Expert

Calculation of national income from the given data:Derive the equation for national saving.

1. You are given the following information for the equations for investment demand, private saving, and the government's deficit: Id =2400-125r, S= 1,750 + 75r, T-G = -350. Suppose that this is a closed economy. The equilibrium interest rate is the one at which national savings and investment demands are equal.

a. Derive the equation for national saving.

b. Compute the equilibrium interest rate. Compute the amount of investment demand, private saving, and national saving at the equilibrium interest rate.

c. Suppose that the government budget deficit is cut by $200 billion. Compute the new equilibrium interest rate. Compute the values of investment demand, private saving, and national saving at the new equilibrium interest rate.

d. Compare and contrast your answers to parts b and c.

2. Given the information at the beginning of problem 1, assume we have a small open economy and that the foreign interest rate is 4.8 percent.

a. find out the amounts of investment demand, private saving, national saving, net exports, and net foreign borrowing at the foreign interest rate.

b. Suppose that the government budget deficit is cut by $200 billion. Compute the new values of investment demand, private saving, national saving, and vet exports. Is the economy now borrowing from the rest of the world or lending to the rest of the world?

c. Suppose that instead of a small open economy, we have a large open economy, and that initially the domestic and foreign interest rates are both 4.8 percent. The government budget deficit is cut by $200 billion. As a result, the domestic and foreign interest rates both decline to 4.4 percent. Compute the new amounts of investment demand, private saving, national saving, net exports, and foreign borrowing (lending) at the new domestic and foreign interest rates.

d. describe why your answers to parts b and c differ.

3. Suppose a country has net exports of 40, transfer payments of 20, net investment income of -15, and a balance of payments surplus of

4. Find this country's current account balance and capital account balance.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M920861

Have any Question? 


Related Questions in Business Economics

Free trade and restricted trade - benefits and cost1-2

Free Trade and Restricted Trade - Benefits and Cost 1-2 paragraphs APA format/ no plagarism Using your own words, define both free and restricted trade. What do you feel are the benefits and the cost to having free trade ...

Assignmentinstructions1 select an illegal activity and

Assignment Instructions 1. Select an illegal activity and transform/mask its' true purpose with the disguise of a legitimate business operation. In other words, create a start-up business that would be viewed as a legal ...

Assessment task descriptiontopicstudents will be required

ASSESSMENT TASK: DESCRIPTION Topic Students will be required to choose a specific enterprise (it should ideally be one with which they are somewhat familiar) and develop a sustainability indicators monitoring system for ...

1what is the production possibilities curve and how is it

1. What is the production possibilities curve and how is it useful? 2. What 4 factors contribute to determining any point in this model? 3. How would we apply this framework to the real world? 4. You are planning to expa ...

1 there is a small country whose domestic demand and supply

1) There is a small country whose domestic demand and supply for a good x are given below (where P is the price of X) [drawing a demand and supply graph may be helpful to you, but is not required.] D: P=100-Q S: P=10+2Q ...

In the united states as in most countries we value the

In the United States, as in most countries, we value the benefits of a free and competitive market. This suggests an interesting question: what if there were to be no Antitrust laws or other regulations on business activ ...

Assignmentarticle reportplease select a marketing topic you

Assignment Article Report Please select a marketing topic you learned and then search in the Wall Street Journal (either online or hardcopy *) and select an article about that topic within the last 12 months. To do this, ...

Assignmentyou must submit 2 files to this link once done as

Assignment You must submit 2 files to this link once done as follows: Part 1) An MS Excel spreadsheet (.xls or .xlsx no other file formats will be accepted) use the dataset spreadsheet provided for the assignment and inc ...

Assignment -consider the following cobb douglas production

Assignment - Consider the following Cobb Douglas production function where Y is maize output, X 1 is labour input, and X 2 is the capital. Data for estimating this equation is given in the Table below. Y = β 0 X 1i β_1 X ...

Question 1 for the following situations calculate

Question 1 . For the following situations, calculate elasticity of demand and comment on the answer.                             When the price of commodity X was Rs. 12/-, 40 units it were demanded. When the price decre ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro