Please help with this from c and d. Please make it make sense because I have seen answers that dont seem right. With graphs as well if you can for the two. Consider an economy described by the following equations: Y=C + I +G Y=7,000 G=4000 T=2,000 C=150+0.75(Y-T) I=1,000-50r a. In this economy, compute private saving, public saving and national saving. b. Calculate the equilibrium interest rate. c. Now suppose the G rises by 1,000. Compute private saving, public saving, and national saving. d. Calculate the new equilibrium interest rate.
Please help with this from c and d. Please make it make sense because I have seen answers that dont seem right. With graphs as well if you can for the two.
Consider an economy described by the following equations:
Y=C + I +G
Y=7,000
G=4000
T=2,000
C=150+0.75(Y-T)
I=1,000-50r
a. In this economy, compute private saving,
b. Calculate the equilibrium interest rate.
c. Now suppose the G rises by 1,000. Compute private saving, public saving, and
national saving.
d. Calculate the new equilibrium interest rate.
Dear Student as you have asked for solution of Part C and D only, kindly find the images attached for detailed solution. Remember that G rises by 1000 for this part so it will add in the initial G which was 4000. New G will become:- 4000+1000=5000.
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Could I have a graphical representation of question c?
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