1. In an economy, the output is 25, the consumption is 14, and the government spends six and collects 5. The net exports are positive 1 a. Find the private equilibrium savings. b. For the above question, find the volume of investment supplied. c. The firms' demand for funds equals their marginal product of capital function. We approximate it here as I = 5 - 40r Find the equilibrium interest rate on the loanable funds market, and report it here in decimals, not percentages.
1. In an economy, the output is 25, the consumption is 14, and the government spends six and collects 5. The net exports are positive 1
a. Find the private equilibrium savings.
b. For the above question, find the volume of investment supplied.
c. The firms' demand for funds equals their marginal product of capital function. We approximate it here as
I = 5 - 40r
Find the equilibrium interest rate on the loanable funds market, and report it here in decimals, not percentages.
d. graph of the financial
Comment on why the NX=1 has the effect on investment that it does.
e. Now, the government deepens its budget deficit to G-T = 2. For simplicity, assume that output and savings don't react. Find the new quantity of investment supplied.
f. Find the new equilibrium interest rate, and report it here in decimals.
g. graph of the financial market comparative statics. Label axes and curves, specifically label investment supply before and after with I0 and I1. Show on axes how the
.
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d. graph of the financial
Comment on why the NX=1 has the effect on investment that it does.
e. Now, the government deepens its budget deficit to G-T = 2. For simplicity, assume that output and savings don't react. Find the new quantity of investment supplied.
f. Find the new equilibrium interest rate, and report it here in decimals.
g. graph of the financial market comparative statics. Label axes and curves, specifically label investment supply before and after with I0 and I1. Show on axes how the
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