7.2 Additional Problem 23 (algo)Question HelpThe table sets out the data for an economy when the government's budget isbalanced.Realinterest rate(percentper year)Loanable funds Loanable fundsdemandedsuppliedCalculate the equilibrium real interest rate, investment, and private saving.(billions of 2007 dollars)If planned saving decreases by $1 billion at each real interest rate, explain the9.07.0change in the real interest rate and investment,38.08.0709.0If planned investment decreases by $1 billion at each real interest rate, explain thechange in saving and the real interest rate.6.010.05.011.0The real interest rate is percent a year.>>> Answer to 1 decimal place.74.012.03.013.0

Equilibrium real interest rate is at a point where loanable funds demanded is equal to supplied. At…

The table sets out the data for an economy when the government's budget is balanced. Calculate the equilibrium real interest rate, investment, and private saving. If planned saving decreases by $1 billion at each real interest rate, explain the change in the real interest rate and investment. If planned investment decreases by $1 billion at each real interest rate, explain the change in saving and the real interest rate. The real interest rate is O percent a year. >>> Answer to 1 decimal place.

The table sets out the data for an economy when the government's budget is balanced. Calculate the equilibrium real interest rate, investment, and private saving. If planned saving decreases by $1 billion at each real interest rate, explain the change in the real interest rate and investment. If planned investment decreases by $1 billion at each real interest rate, explain the change in saving and the real interest rate. The real interest rate is O percent a year. >>> Answer to 1 decimal place.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that one day your rich aunt unexpectedly gives you $10,000 to use as you like, no strings attached. A fraction of that gift will be consumed (the marginal propensity to consume, MPC) or saved (the marginal propensity to save, MPS). If you are like the "average American," you will save less than 5% of your $10,0002. The money you don't save is consumed and is spent on purchasing goods and services. So, whether you spend the increased income on food, entertainment, paying off loans, or a new bicycle, that money goes back into the economy, where it generates revenue through taxes, and gets spent again. This is because an injection of extra income leads to more spending, which creates more income, and so on. In this way, your money is actually spent many times and it has the effect of stimulating the economy through what is known as the multiplier effect. Gifts from rich aunts are not the only way to stimulate the economy. Governments occasionally provide an economic stimulus by…
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Consider an economy described as follows: Y = C+1+G Y= 8,000. G= 2,500. T 2,000. C- 1,000 + 2/3(Y-T). 1-1,200-100r. 'n this economy, compute private saving, public saving, and national saving. How much is the marginal propensity to consume? 1. 2. 3. Find the equilibrium interest rate.
Consider the classical model. Suppose the government decreases taxes by some amount. What happens to public saving, private saving, and investment? Increase in public saving, decrease in private saving, and decrease in investment O b. Decrease in public saving, increase in private saving, and decrease in investment O c. None of the other choices are correct O d. Decrease in public saving, private saving, and investment
Would like all parts answered please; specifically parts (d,e,f)
4. Assume that the economy is described by the following equations: Y=C+l+G, Y=8490, G-2719, T-2056, C-258+ 1/2(Y-T), I-400 + 40r. Private saving and the equilibrium interest rate are O Private saving: 2959; The interest rate: 47.4 O Private saving: 2296; The interest rate: 23.7 O Private saving: 2296; The interest rate: 47.4 O Private saving: 2959; The interest rate: 23.7
Fill in the aggregate saving column in the following table. (Include a minus sign if necessary.) Aggregate Income, Y $0 100 200 300 400 500 600 Aggregate Consumption, C $200 250 300 350 400 450 500 The value of the MPC is one decimal place.) T Aggregate Saving, S $-200 150 100 50 0 50 100 (Round your response to CXIE DE Aggregate consumption, C Aggregate saving, S 700- 600- 500- 400 300- 200 100- 0 -100- -200- 300- -400- 100 200 300 400 500 Aggregate income, Y 600
If business taxes are reduced and the real interest rate increases: * A. consumption and saving will necessarily increase. B. the level of investment spending might either increase or decrease. C. the level of investment spending will necessarily increase D. the level of investment spending will necessarily decrease
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Economics
A high interest rate will lead to: O a. low investment spending. O b. no investment spending. no changes in investment spending. O d. high investment spending. C.
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