8. Economic growthThe following graph shows the production possibilities curve (also known as the productionpossibilities frontier) of an economy that produces cars and computers. Suppose that a rise in thiseconomy's saving rate allows for investment in modern, efficient manufacturing plants.Adjust the production possibilities curve (PPC) to show the economy's new production possibilitiesafter the rise in the saving rate.Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one orboth endpoints to the desired position. Points will snap into position, so if you try to move a pointand it snaps back to its original position, just drag it a little farther.QUANTITY OF CARS (Mor)24PPC510QUANTITY OF COMPUTERS (Mor)15Suppose society faces a broad tradeoff between allocating resources to the production ofinvestment goods (computers) and consumption goods (cars) before the rise in the saving ratedescribed above.Which of the following events would be most likely to lead to the rise in the saving rate you justillustrated?Increasing production of investment and consumption goodsDecreasing production of investment and consumption goodsDecreasing production of investment goods and increasing production of consumptiongoodsIncreasing production of investment goods and decreasing production of consumptiongoods

The production possibility curve represents the most efficient bundles of…

Which of the following events would be most likely to lead to the rise in the saving rate you just illustrated? Increasing production of investment and consumption goods Decreasing production of investment and consumption goods Decreasing production of investment goods and increasing production of consumption goods • Increasing production of investment goods and decreasing production of consumption goods

Which of the following events would be most likely to lead to the rise in the saving rate you just illustrated? Increasing production of investment and consumption goods Decreasing production of investment and consumption goods Decreasing production of investment goods and increasing production of consumption goods • Increasing production of investment goods and decreasing production of consumption goods

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following transactions are counted towards investment (I) by the BEA? a A private university purchases furniture for a new faculty member. b Steel is purchased by Ford to be used in the production of cars. c The government buys a new playground for a public park. d An airline buys blankets for passengers to use on red-eye flights.
If Government Spending (G) is 200 million, Tax Revenue (T) is $260 million \$2 Consumption is $300 million, and GDP (Y) is 780 million. Public saving is
If consumers decide to increase saving, then C decreases, r decreases, I increases, and Y:
Consider the expressions T-G and Y-T-C. Which of the following statements is correct? Each one of these is equal to national saving. Each one of these is equal to public saving. The first of these is private saving; the second one is public saving. The first of these is public saving; the second one is private saving.
Suppose that in a closed economy GDP is equal to $39,000, consumption equal to $18,000, government purchases equal $7,000, and taxes equal $8,500. What are private saving, public saving, and national saving? $1,500, $12,500, and $14,000, respectively $30,500, $21,000, and $15,500, respectively $12,500, $1,500, and $14,000, respectively $21,000, $30,500, and $15,500, respectively
Figure 7.2 45° C, S S Y=200 In Figure 7.2, if income is $200, then: consumption is $100. saving is also $200. consumption is zero. O saving is zero.
The Economist article, "Low interest rates leave savers with few good options", states that savers are likely to respond to low rates in one of the following three ways: Lincrease athletic activity, go back to school, or, spend more on entertainment O re-watch the movie Trading Places, invest in Treasury bills, or, move to Germany save more and spend less, set aside less money due to higher returns, or, decrease investments in risky assets save less and spend more, set aside more money to make up for low returns, or, increase investments in risky assets
Please solve Parts D,E,F
The figure below depicts a typical individual's income and consumption paths over his or her lifetime. Use the list on the right to label the diagram. me consumption www Later Income path 8 Borrowing region c) Consumption path D) Dissaving region Saving region
Which of the following can cause planned investment by firms to increase? a. To reduce constant budget deficits, the government announces plans to increase the corporate tax rate. b. An increase in the interest rate due to an increase in the cost of making financial transactions. c. Firms become optimistic about economic conditions after seeing reports of strong growth in consumer spending. d. A major recession has reduced consumption spending, hurting profit levels for high-end car manufacturers.
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________ Is that type of investment which is not affected by change in the level of output or income