Illustrate what are the values of private saving public, Ask an Expert

Economics

Figuring out consumption, investment and tax from the aggregate expenditure equation.

Assume that GDP (Y) is 5,000; taxes (T) are 1,000, and government spending (G) is 1,500. Consumption (C) is given by the equation: C = 1,000 + 0.3(Y - T), Investment (I) is given by the equation: I = 1,500 - 50r where r is the real interest rate in percentage (i.e. if real interest rate is 5%, r=5.

a. What are the equilibrium values of C, I, and r?

b. Illustrate what are the values of private saving, public saving, and national saving?

c. Now assume there is a technological innovation that makes business want to invest more. It raises the investment equation to I = 2,000 - 50r. What are the new equilibrium values of C, I, and r?

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M922723

Have any Question?Write your Review or question?

Related Questions in Business Economics

The following is historical data on the us dollar -

The following is historical data on the U.S. dollar - Canadian dollar exchange rate: date U.S./Canadian Canadian/U.S. 1/20/2016 0.68 1.46 9/6/2018 0.76 1.32 Which currency has appreciated over this period?

According to kulish what is about the design of the euro

According to Kulish, what is about the design of the euro currency that lessens its appeal compared to prior national currencies?

A suppose that for a given year national saving in a

a. Suppose that, for a given year, national saving in a country (an open economy) equals 100, private consumption equals 50, and government consumption equals 20. What is the level of output in this country in this year? ...

Sally purchases hardwood lumber for a custom

Sally purchases hardwood lumber for a custom furniture-building shop. She uses three suppliers, Northern Hardwoods, Mountain Top, and Spring Valley. Lumber is classi ed as either clear or has defects. Sally estimates tha ...

What type of monopoly is sydney water describe the main

What type of monopoly is Sydney Water? Describe the main characteristics of this monopoly type in general and in relation to Sydney Water.

A psychologist examining art appreciation selected an

A psychologist examining art appreciation selected an abstract painting that had no obvious top or bottom. Hangers were placed on the painting so that it could be hung with any one of the four sides at the top. The paint ...

Why do households need to hold a mixture of bonds and money

Why do households need to hold a mixture of bonds and money? What determines the proportion of bonds/money that household keeps?

Research on the web ideas for small businesses for students

Research on the web ideas for small businesses for students. Describe at least three different ideas and include what for of business ownership you would use to structure each business.

A sample of n 4 individuals is selected from a normal

A sample of N = 4 individuals is selected from a normal population with μ = 70 and σ = 10. A treatment is administered in the sample, and after the treatment, the sample mean is found to be = 75. a. On the basis of the s ...

A five-year bond with a yield of 11 continuously compounded

A five-year bond with a yield of 11% (continuously compounded) pays an 8% coupon at the end of each year. a) What is the bond's price? b) What is the bond's duration? c) Use the duration to calculate the effect on the bo ...

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

Recent Questions

Ask Business Economics Expert