Jane earns $300 in her 1st period, $1,000 in her second period, and $200 in her 3rd and last period. She starts the 1st period and ends her 3rd period with zero assets and wishes to smooth consumption perfectly across these three periods. She faces borrowing constraints and cannot borrow at all. The real interest rate is 0%. Her 1st period saving is

Jane earns $300 in her 1st period, $1,000 in her second period, and $200 in her 3rd and last period. She starts the 1st period and ends her 3rd period with zero assets and wishes to smooth consumption perfectly across these three periods. She faces borrowing constraints and cannot borrow at all. The real interest rate is 0%. Her 1st period saving is

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter8: The Keynesian Model

Section: Chapter Questions

Problem 13SQ

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Suppose Jack starts 1st period with 0 wealth but earns 200, his second period income is 700 and his last and 3rd period income is 300. He does not care about a 4th round. The real interest rate is 0 but he can not borrow . He wants to smooth consumption perfectly across the 3 periods. His consumption and saving in the first period are?
Economists in Funlandia, a closed economy, have collected the following information about the economy for a particular year: Y = 10,000; C = 6,000; T = 1,500; G = 1,700. The economists also estimate that the investment function is: I =3,300 –100r where r is the country’s real interest rate, expressed as a percentage. Calculate private saving, public saving, national saving, investment, and the equilibrium real interest rate
Selim has no income in period 1 (consumption now) and an income of 1800Ł in period 2 (consumption later). The current interest rate is 20% (r=0.2) on consumer loans. Based on this information, answer the following questions a. What is the maximum amount that Selim can borrow to spend in period 1? Explain your answer. Can he spend 600 in period 2 and borrow 1000 in period 1?
Economists in Pakland, a closed economy, have collected the following information about the economy for a particular year: Y = Rs.10,500 C = Rs.6,000 T = Rs.1,500 G = Rs.1,700 The economists also estimate that the investment function is: I = 3,300 - 100r Where, r is the country’s real interest rate, expressed as a percentage. Calculate: Private savingBlank 1(Write Only numbers in the blank. Do not write plus signs, minus signs, commas, full stops, currency etc.)Public savingBlank 2(Write Only numbers in the blank. Do not write plus signs, minus signs, commas, full stops, currency etc.)National savingBlank 3(Write Only numbers in the blank. Do not write plus signs, minus signs, commas, full stops, currency etc.)InvestmentBlank 4The equilibrium real interest rateBlank 5(Write Only numbers in the blank. Do not write plus signs, minus signs, commas, full stops, currency etc.)If the government increases taxes to Rs.1,800, calculate private savingBlank 6((Write Only numbers in the…
Based on Abel, Bernanke and Croushore, 10th edition, Chapter 4, Numerical Problems No. 1. A consumer is making saving plans for this year and next. She knows her real income after taxes will be $50,000 in both years. Any part of her income saved this year will earn a real interest rate of 10% between this year and next year. Currently, the consumer has no wealth (no money in the bank or other financial assets, and no debts). There is no uncertainty about the future. a) Formally derive the consumer’s intertemporal budget constraint. b) Using the given numerical values rewrite and graph the budget line. c) Find the consumer’s PVLR. The consumer wants to save an amount this year that will allow her to (1) make college tuition payments next year equal to $16,800 in real terms; (2) enjoy exactly the same amount of consumption this year and next year, not counting tuition payments as part of next year’s consumption; and (3) have neither assets nor debts at the end of next year. d) In the…
Assume that in this economy consumption (C) is given by the equation C = 600 + 0.6(Y – T). Investment (I) is given by the equation I = 2,000 – 100r, where r is the real rate of interest in percent terms. Taxes (T) are 500 and government spending (G) is also 500. What are the values of private saving, public saving, and national saving?
Economists in Funlandia, a closed economy, have collected the following information about the economy for a particular year: Y = 10,000 C = 6,000 T = 1,500 G = 1,700 The economists also estimate that the investment function is: I = 3,300 – 100 r, Where r is the country’s real interest rate, expressed as a percentage. Calculate private saving, public saving, national saving, investment, and the equilibrium real interest rate.
Economists in Funlandia, which has a closed economy, have collected the following information about the economy for a particular year: Y = 11,500 C = 7,000 T = 1,300 G = 1,900 The economists also estimate that the investment function is: I 3,200 - 100r where r is the country's real interest rate, expressed as a percentage. Complete the following table by calculating private saving, public saving, national saving, investment, and the equilibrium real interest rate. Component Private Saving Public Saving National Saving Investment Equilibrium Real Interest Rate Amount
Solve it correctly please. I will rate accordingly.
Consider an economy described by the following equations: Y = C+I+G Y = 5000 G = 1000 T = 1000 C = 250 + 0.75(Y-T) I = 1000 - 50r In this economy, compute private saving, public saving, and national saving. Find equilibrium interest rate. Now suppose that G rises to 1250. Compute private saving, public saving, and national saving. Find the new equilibrium interest rate. Using your knowledge of Macroeconomics and intuition explain the reason why increasing government expenditure causes interest rate to rise? If the government wants to increase the amount of savings in the economy, how should it alter government spending? What effect will this action have on the interest rate in the economy?
In a closed economy, the gross domestic product is $25,000, consumption is $8,200 and taxes are $3,700. If the national saving is 3,000, if the investment function is represented by I = 3,400-80r, the equilibrium interest rate is: Select one: a. 12% b. 5% c. 3% d. 8% e. None of the answers are correct
940, 1000 (d) 1080, 540 (e) 2, 108 4. Consider a closed economy with the following information given. We know that the total pro- duction of this economy is exactly 2000 units (Y=2000). Government expenditure is also known and is 320 units (G= 320). The consumption expenditure function is: C = 20+0.8 x (YT), hence autonomous consumption is 20 units, while further consumption is a positive function of the disposable income (Y-T). Tax is a positive function of total income T = 0.15 x Y. Finally, the investment function is given as