Interest rate 4% 3% + $50 500 530 D₂ D₁ Savings, investment, government borrowing (millions of dollars) Consider the graph of Nation A which is in recession and in order to increase the economy the government chooses to raise the spending and decides to borrow $ 50 million to construct famous economists' statues. Decide which of the given statements is true? a) There will be an increase in investment spending beyond $530 million. b) There will be a decline in investment spending to $480 billion. c) There will be an increase in consumption of $30 million. d) There will be a net change in aggregate spending of 30 million.

Interest rate 4% 3% + $50 500 530 D₂ D₁ Savings, investment, government borrowing (millions of dollars) Consider the graph of Nation A which is in recession and in order to increase the economy the government chooses to raise the spending and decides to borrow $ 50 million to construct famous economists' statues. Decide which of the given statements is true? a) There will be an increase in investment spending beyond $530 million. b) There will be a decline in investment spending to $480 billion. c) There will be an increase in consumption of $30 million. d) There will be a net change in aggregate spending of 30 million.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Please provide accurate and correct answers to both questions without explanation. Thank you for your assistance.

Interest
rate
4%
3%
+ $50
500
530
D₂
D₁
Savings, investment,
government borrowing
(millions of dollars)
Consider the graph of Nation A which is in recession and in order to increase the economy the
government chooses to raise the spending and decides to borrow $ 50 million to construct
famous economists' statues. Decide which of the given statements is true?
a) There will be an increase in investment spending beyond $530 million.
b) There will be a decline in investment spending to $480 billion.
c) There will be an increase in consumption of $30 million.
d) There will be a net change in aggregate spending of 30 million.

For the given cash flow, find out the future equivalent (F) at 8% per year:
2009
$1,000
$800
a) $3,000
b) $3,500
c) $1,000
d) $1,500
Years
2010 2011
$600
$400
2012
F=?

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