Suppose the economy is four sectors economy. The economy is represented by the following: C = 400 + 0.40Yd G= 40 I= 25 T= 5 NX = - 25 where; C = Consumption G= Government Expenditure I = Investment T= Tax NX = Net Exports

Q: Explain why investment (I) varies more from year-to-year than consumption (C).

A: Lets understand the factors on which the investment depends: 1. Marginal efficiency of capital: It…

Q: Give the equation for a linear consumption function?

A: According to the given question Simply we can say that a linear consumption function is an function…

Q: Show on a graph of the market for saving and investment the effect of the following. (The graph is a…

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Q: What is it mean by full price and income when discussing household consumption?

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Q: Use the following consumption schedule to answer the next question. At income level 3, the amount of…

A: There are two curves provided in a (Income - Consumption ) plane , which are to be identified as…

Q: Classify each of the following scenarios listed in the table below using the macroeconomic…

A: The objective of the question is to classify the given scenarios into either saving or investment…

Q: What does the consumption function show

A: In an economy, households are the people who serve their services as labor or as a self-employed…

Q: Consider the circular flow of expenditure and income in the Canadian economy. Which of the following…

A: The circular flow of income and expenditure basically refers to the mechanism through which an…

Q: Consider the following economy C=1000+0.4(Y-T) 1=500 T=400 G=300 What is the investment of…

A: Equilibrium is the state in which market supply and demand balance each other, and as a result…

Q: If there is an increase in the personal income tax rate, and people do not receive a pay increase,…

A: The tax is a unilateral payment made by the public towards the government for various purposes such…

Q: In the future report of U.S. Gross Domestic Product (GDP) for Quarter 1 of 2023, which of the…

A: Gross domestic product (GDP) measures the money value of all final goods and services produced…

Q: If the consumption level is $84 and the saving is $44 find the value of the national income???

A:

Q: Disposable Income ($) Consumption ($) 1,000 800 1,100 880 1,200 960 1,300 1,040 1,400 1,120

A: The disposable income is the portion of the income which is left after the deduction of the taxes.…

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

A: Investments are made when capital assets are bought to produce the goods and services, which means…

Q: How is it possible for consumption expenditure to be positive even when disposable income is…

A: Even when disposable income is zero, consumption expenditure can still be positive because…

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.