An economy has full-employment output of 6,000. Government purchases, G, are 1,000. Desired consumption and desired investment arecd=3,800-2,000r +0.25Y, andP=1,200-3,000r,where Y is output and r is the real interest rate.a. Find an equation relating desired national saving, S, to r and Y.S=+r+Y

National saving can be thought of as the amount of remaining income that is not consumed, or spent…

An economy has full-employment output of 6,000. Government purchases, G, are 1,000. Desired consumption and desired investment are 0.25Y, and c=3,800-2,000+ P=1,200-3,000r. where Y is output and r is the real interest rate. a. Find an equation relating desired national saving. Sº, tor and Y. Sº=+r+y

An economy has full-employment output of 6,000. Government purchases, G, are 1,000. Desired consumption and desired investment are 0.25Y, and c=3,800-2,000+ P=1,200-3,000r. where Y is output and r is the real interest rate. a. Find an equation relating desired national saving. Sº, tor and Y. Sº=+r+y

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Savings,investment And The Financial System

Section: Chapter Questions

Problem 5PA

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