Explain the difference between saving andinvestment as defined by a macroeconomist. Whichof the following situations represent investment andwhich represent saving? Explain.a. Your family takes out a mortgage and buys a newhouse.b. You use your $200 paycheck to buy stock in AT&T.c. Your roommate earns $100 and deposits it in hisaccount at a bank.d. You borrow $1,000 from a bank to buy a car to usein your pizza delivery business.

Q: If household saving decreases by $4 million, business saving increases by $4 million, and the…

A: Household savings refers to the portion of income that is not spent on immediate consumption but…

Q: The saving schedule is drawn on the assumption that as income increases, Select one: a. saving will…

A: A savings schedule is a table or graph that represents the relationship between different levels of…

Q: Classify each of the following based on the macroeconomic definitions of saving and investment.…

A: Investment is the purchase of items to facilitate production of final goods and services.

Q: If national saving equals $100,000, net taxes equal $100,000 and government expenditure equals…

A: The entire amount of revenue in an economy that is not spent by individuals or companies and is thus…

Q: Increases in investment spending cause interest rates to increase. a. Ohouseholds will voluntarily…

A: True, because when the interest rate in the economy increases, the opportunity cost of consumption…

Q: Which of the following should NOT be considered as part of fixed investment? 1. Toyota buys a new…

A: According to the economist investment is such a concept which focuses on the goods production in…

Q: 1. Explain the difference between public & private saving.

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: When a bank takes savings from many small savers and lends it to many borrowers, the bank…

A: The primary role of banks is to act as intermediaries between lenders and borrowers. Banks take in…

Q: A borrower cannot become a saver if the rate of interest decreases, but might become a saver if the…

A: To understand the above stated problem firstly we state the intertemporal budget constraint faced by…

Q: What are the major economic functions of the interest rate? How might the fact that many businesses…

A: Answer - Major economic functions of the interest rate :- The interest rate has many economic…

Q: When economists say “investment,” they are referring to financial investments, which are purely…

A: The bonds and stocks are the financial asset that gives the return to the investors. It is a way of…

Q: Question 7 Use the market for saving and investment to show the effect of the following: Firms are…

A: Saving is the process of consistently building up cash, usually in a bank account. Individuals…

Q: In the Loanable Funds Market Model, ceteris paribus, which of the following events would best…

A: Answer (C). The government reduced the tax rate on saving income.

Q: Assume Marco is initially borrowing and investing 100, with a return on investment of 50% and an…

A: Investment and borrowing are the key ways through which individuals and businesses try to reach…

Q: Tom buys a $5000 bond from XYZ Company. XYZ Company uses the $5000 to purchase a new piece of…

A: Investment spending in macroeconomics is a process of investing/allocating money in the anticipation…

Q: 6. In macroeconomist mind, Explain how they are able to distinguish the terms between investment and…

A: Stock is the ownership certificate of any company owned by shareholders.

Q: The table sets out the data for an economy when the government's budget is belanced. Calculate the…

A: The real interest rate is a situation that is termed as the equilibrium interest rate. It means that…

Q: Suppose the government runs fewer budget deficit and there is a decrease in the average household…

A: Here, it is given that government has fewer budget deficit, which influence the demand for loanable…

Q: 2) Last year, Alice carned $36,000 from her job. During the same year, she saved $9,000. a. What was…

A: a) Given that, Alice earned $36000 Ans she saved $9,000 The rate of saving is given by: =…

Q: Suppose the market for loanable funds is currently in equilibrium. Which of the following factors…

A: 1. An rise in business confidence (c) is likely to result in an increase in interest rates in a…

Q: 3. The meaning of saving and investment Classify each of the following scenarios listed in the table…

A: In macroeconomics, saving is that portion of income that is not spent on consumption. In…

Q: In January 2015, Tim's Gyms, Inc. owned machines valued at $1 million. During the year, the market…

A: Gross investment: It is the money spent on the purchase of new capital.  Net investment: It is the…

Q: In order to increase the creativity of its staff, Google invested in a highly unique headquarters…

A: Investment refers to the expenditure that is incurred with the view of earning higher returns in the…

Q: Related to the Economics in Practice on p. 156: According to the "paradox of thrift," as individuals…

A:

Q: 1. Use a saving-investment diagram to explain what hap- pens to saving, investment, and the real…

A: Meaning of IS-LM Curve: The term IS-LM curve refers to the combination between market goods and…

Q: As the interest rate increases, the opportunity cost of _____. a. ​borrowing decreases b. ​past…

A: The opportunity cost is the cost of forgoing the next best alternative when making a decision. In…

Q: 1. The opportunity cost of holding money Suppose you've just inherited $5,000 from a relative.…

A: This can be described as a concept that is related to the cost of holding the money (or cash) is the…

Q: 3. In cases below, answer questions below. 3.a. People’s preference for saving increased (so people…

A: 3. a. For any given rate of interest now people will be saving more. Savings is also the supply for…

Q: If households increase savings in their bank accounts, therefore increasing investment spending. A.…

A: Savings represent supply of lonable funds and Investments represent demand for lonable funds.  At…

Q: Using the figure below, graphically prove that the consumer saves less when his future income…

A: With increase in the future income, the budget line shifts outwards to A'B'. Along with it, the…

Q: It has been said that a society with high savings rate is a society with a high standard of living.…

A: (Q) It has been said that a society with a high savings rate is a society with a high standard of…

Q: Explain the effect of a sustained increase in savings on the growth of output in detail please. Also…

A: Investment: It refers to the amount which is invested in the form of assets. The increase in…

Q: Figure 7.2 45° C,S V=200 In Figure 7.2, if income is $200, then: consumption is $100. saving is also…

A: The curve is the locus of points representing the consumption bundles chosen for each of several…

Q: An increase in the real interest O A Increases savings for borrowers, and decreases the savings of…

A: Economics as a subject deals with the study, allocation, and decision-making process of allocating…

Q: If current and future consumption are both normal goods, a decrease in the interest rate will…

A: The intertemporal choice model: The intertemporal choice model was developed by Irvin Fisher. Irvin…

Q: Assume there are no investment projects in the economy that yield an expected rate of return of 25…

A: It can be defined as the increase in the value of investment over a particular period of time,…

Q: GDP is $5 billion this year in a closed economy. Consumption is $3 billion, and government spending…

A: Given ,  GDP = 5 billion  Consumption = 3 billion  Government spending = 0.5 billion  Taxes = 0.5…

Q: Which of the following is an example of investment? OA. Continental buying Airbus planes OB. Mike…

A: In economics, investment refers to the purchase of goods that are not consumed today but are used in…

Q: The following national accounting data are available for an economy for 2020. GDP Household…

A: National savings is the total savings of an economy which includes the savings of households,…

Q: 7. Why does invest only in workers and neglecting capital expenditures hurt workers? Explain

A: The economics as a study is based upon the idea that the resources which are present with the…

Q: 10. Work It Out. Consider an economy described as follows: Y = C+I+G Y = G = T = C = I = 1,200 100…

A: First, let's define the variables:Y is national income, which is 8,000.G is government spending,…

Q: The following table contains data on the relationship between saving and income. a. Rearrange the…

A: The income per year and the savings per year is given below but not in the right order. Income per…

Q: The catch-up effect refers to the idea that Select one: O a. Rich countries aid relatively poor…

A: Answer: d (It is easier for a country to grow fast if it starts out relatively poor) The catch-up…

Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.