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Compute private saving, national saving, equilibrium interest rate

Consider an economy discussed by the subsequent equations:

Y = C + I + G
Y = 5,000
G = 1,000
T = 1,000
C = 250 + 0.75 (Y - T)
I = 1,000 - 50 r

a) In this economy, compute private saving, public saving, and national saving

b) Find the equilibrium interest rate

c) Now suppose which G rises to 1,250. Compute private saving, public saving, and national income

d) Find the new equilibrium interest rate

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M917034

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