Principles Of Macroeconomics V 8.0
18th Edition
ISBN: 9781453378717
Author: Taylor
Publisher: BOSTON ACADEMIC (DBA FLAT WORLD)
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Textbook Question
Chapter 18, Problem 1SCQ
In a country, private savings equals 600, the government budget surplus equals 200, and the trade surplus equals 100. What is the level of private Investment in this economy?
Expert Solution & Answer
To determine
The level of private investment in the economy needs to be determined.
Explanation of Solution
It is given that the private savings equals 600, the government budget surplus is equal to 200 and the total surplus is equal to 100. The private investment is calculated by using the national accounting identity by the equation given below:
S + (T-G) = I + (X-M)
S is private savings,
T is taxes,
G is government spending,
M is imports,
X is exports, and
I is investments
Hence, the level of private investment in the economy is 700.
Economics Concept Introduction
Basically, budget deficit is defined as the amount in which the spending of the government is greater than revenue collected through taxes Any increase in government budget deficit will affect the economy in many ways..
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Chapter 18 Solutions
Principles Of Macroeconomics V 8.0
Ch. 18 - In a country, private savings equals 600, the...Ch. 18 - Assume an economy has a budget surplus of 1,000,...Ch. 18 - In the late 1990s, the U.S. government moved from...Ch. 18 - Imagine an economy in which Ricardian equivalence...Ch. 18 - Why have many education experts recently placed an...Ch. 18 - What are some steps the government can take to...Ch. 18 - Based on the national saving and investment...Ch. 18 - How would you expect larger budget deficits to...Ch. 18 - Under what conditions will a larger budget deficit...Ch. 18 - What is the theory of Ricardian equivalence?
Ch. 18 - What does the concept of rationality have to do...Ch. 18 - What are some of the ways fiscal policy might...Ch. 18 - What are some fiscal policies for improving a...Ch. 18 - What are some fiscal policies for improving the...Ch. 18 - Explain how cuts in funding for programs such as...Ch. 18 - Assume there is no discretionary increase in...Ch. 18 - Explain how decreased domestic investments that...Ch. 18 - The U.S. government has shut down a number of...Ch. 18 - Explain how a shift from a government budget...Ch. 18 - Describe how a plan for reducing the government...Ch. 18 - Explain whether or not you agree with the premise...Ch. 18 - Explain why the government might prefer to provide...Ch. 18 - Under what condition would crowding out not...Ch. 18 - What must take place for the government to run...Ch. 18 - Sketch a diagram of how a budget deficit causes a...Ch. 18 - Sketch a diagram of how sustained budget deficits...Ch. 18 - Assume that the newly independent government of...Ch. 18 - Illustrate the concept of Ricardian equivalence...Ch. 18 - During the most recent recession, some economists...
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