d. What is nationai savıngs in unis economy? National investment? e. Now, taxes decrease by $3 trillion and household consumption increases by $2 trillion. Assuming all else equal, find public, private, and national savings f. Assume the market for loanable funds was in equilibrium before the tax decrease and consumption increase mentioned in part e). Which curve in the loanable funds market will be impacted by the events described in part e)? Graphically depict this change and analyze the new market equilibrium.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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22 hw d-f
22. Assume the US is operating in a closed economy and GDP is $20 trillion,
consumption is $8 trillion, government spending is $10 trillion, and there is a
balanced budget.
a. Write the equation for public saving. Solve for public saving in this economy.
b. Solve for net taxes
c. Write the equation for private saving. Solve for private saving in this
economy.
d. What is nationai savıngs in unis economy? National investment?
e. Now, taxes decrease by $3 trillion and household consumption increases by
$2 trillion. Assuming all else equal, find public, private, and national savings
f. Assume the market for loanable funds was in equilibrium before the tax
decrease and consumption increase mentioned in part e). Which curve in the
loanable funds market will be impacted by the events described in part e)?
Graphically depict this change and analyze the new market equilibrium.
g. How might the changes in national saving and investment brought on in part
e) impact productivity in the long run?
Transcribed Image Text:22. Assume the US is operating in a closed economy and GDP is $20 trillion, consumption is $8 trillion, government spending is $10 trillion, and there is a balanced budget. a. Write the equation for public saving. Solve for public saving in this economy. b. Solve for net taxes c. Write the equation for private saving. Solve for private saving in this economy. d. What is nationai savıngs in unis economy? National investment? e. Now, taxes decrease by $3 trillion and household consumption increases by $2 trillion. Assuming all else equal, find public, private, and national savings f. Assume the market for loanable funds was in equilibrium before the tax decrease and consumption increase mentioned in part e). Which curve in the loanable funds market will be impacted by the events described in part e)? Graphically depict this change and analyze the new market equilibrium. g. How might the changes in national saving and investment brought on in part e) impact productivity in the long run?
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