Refer to the diagrams. Other things equal, an interest rate increase will: Question 15 options: leave curve A in place but shift curve B downward. leave curve A in place but shift curve B upward. shift curve A to the left and shift curve B downward. shift curve A to the right and shift curve B upward Expanded Rate of Return, r, and Real Interest Rate, I (%) Investment ($B) Investment ($B) A Real Domestic Product, GDP ($B) B
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- Hello! I need help with this question (in the screen shot). Thank you!8 4 125 275 Planned investment (billions of dollars) Figure 8.8 Refer to Figure 8.8. The amount of planned investment if the interest rate rises from 4% to 8%. Select one: a. remains at $125 billion b. remains at $275 billion c. drops by $150 billion d. rises by $150 billion Interest rate (%)A consumer's current income (y) is 200 and the future income ( t.') is 240. A current lump sum tax (t) of 10 is paid and the tax in the next period (t) is 15. The real interest rate is 20% for each period. Please assume that current and future consumption are complements. and the consumer always prefers to have one unit of current consumption and two units of consumption in the future. Calculate the optimal current and future consumption and the optimal current and future savings. Is the consumer a lender or a borrower? How does he she. as a lender or a borrower. affect the future consumption?
- A consumer's current income (y) is 200 and the future income ( t.') is 240. A current lump sum tax (t) of 10 is paid and the tax in the next period (t') is 15. The real interest rate is 20% for each period. Please assume that current and future consumption are complements. and the consumer always prefers to have one unit of current consumption and two units of consumption in the future.Calculate the consumer's lifetime wealth.Calculate the optimal current and future consumption and the optimal current and future savings. Is the consumer a lender or a borrower? How does he she. as a lender or a borrower. affect the future consumption?TECHNICAL Suppose that permanent income is calculated as the average of income over the past five years – that is YP = (Y + Y-1 + Y-2 + Y-3 + Y-4 Suppose further that consumption is given by C = 0.9YP a. If you have earned $20000 per year for the past 10 years. What is your permanent income? b. Suppose that next year (period t + 1) you earn $30000. What is your new YP? c. What is your consumption this year and next year? d. What is your short run MPC and long run MPC? e. Assuming you continue to earn $30000 starting in period t+ 1, graph the value of your permanent income in each period using the initial YP equation provided above.Assume an economy with 1,000 consumers. Each consumer has income in the current period of 50 units and future income of 60 units and pays a lump-sum tax of 10 units in the current period and 20 units in the future period. The market real interest rate is 8%. Of the 1,000consumers, 500 consumer 60 units in the future, while 500 consumer 20 units in the future. a) Determine each consumer's current consumption and current saving. (b) Determine aggregate private saving, aggregate consumption in each period, government spending in the current and future periods, the current-period government deficit, and thequantity of debt issued by the government in the current period. (c) Suppose that current taxes increase to 15 units for each consumer. Repeat parts (a) and(b) and explain your results.
- A consumer's income in the current period is y = 100 and income in the future period is y'= 120. He or she pays lump-sum taxes t=20 in the current period and t'= 10 in the future period. The real interest rate is 0.1, or 10%, per period. (a) Determine what the consumer's optimal current-period and future-period consump tions are, and what optimal saving is, and show this in a diagram with the consumer's budget constraint and indifference curves. Is the consumer a lender or a borrower? (b) Now suppose that instead of y = 100 the consumer has y = 140 Again, determine optimal consumption in the current and future periods and optimal saving, and show this in a dia gram. Is the consumer a lender or a borrower? (c) Explain the differences in your results be tween parts (a) and (b).The following graph shows the decreasing value of a car over time. (a) Write a sentence that explains the meaning of the ordered pair (4, 9100). After? years the car has a value of $? (b) Find the average rate of change (in dollars per year) of car value for the given points. $? per year.The next three questions involve the following situation. Consider a closed economy in which I $100, 000, 000, 000, and T = $30, 000, 000, 000. $20, 000, 000, 000, G = $45, 000, 000, 000, Y = 1. What is total saving, S? (A) -$30 billion. (B) $35 billion. (C) -$15 billion. (D) $20 billion. 2. What is consumption? (A) $15 billion. (B) $35 billion. (C) -$15 billion. (D) -$35 billion. 3. What is private saving? (A) $15 billion. (B) $35 billion. (C) -$15 billion. (D) -$35 billion. 4. Which of the following assets performs best in times of demand-pull inflation? (A) Gold. (B) Agricultural real estate. (C) Stocks. (D) Bonds.
- a, b and cThe expenses and income of an individual are given in table form to the right. Find the net monthly cash flow (it may be negative or positive). Assume that amounts shown for salaries and wages are after taxes and that 1 month=4 weeks. Income Expenses Part-time job: $1300/month Rent: $550/month Student loans: $6000/year Groceries: $60/week Scholarship: $8500/year Tuition and fees: $7500/year Health insurance: $55/month Entertainment: $300/month Phone: $45/monthIf the interest rate is 8%, how much households and firms will want to borrow?