Saving and investment.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 24, Problem 1.1P

To determine

Saving and investment.

Expert Solution & Answer

Explanation of Solution

Saving is that part of annual disposable income which is used by a consumer to be spent for future consumption. It can be formulized as [S=(Y−T)−C]. Investment is the value of planned plant purchases, equipment purchases and inventories purchase by business firms. Equilibrium occurs at the point when the Income equal to Aggregate expenditure which equals the sum of consumption, government spending and investment (Y=AE=C+I+G) which can only occur if the leakages from circular flow (Savings (S) and Taxes (T)) are exactly matched by injections of demand (Investment (I) and Government spending (G)) i.e; (S+T=I+G). If the saving is greater than taxes and investment equals government spending, then, (S+T>I+G)

If leakages surpass injections, the aggregate expenditure would be lower than aggregate output (C+S+T≡Y>C+I+G) and as a result inventories will increase and the income (Y) will decline. Thus it will experience a recession.

If injections surpass leakages (G>T and S=I, S+T<I+G),the aggregate expenditure would be higher than aggregate output and as a result inventories will decrease and the income (Y) will increase.

Economics Concept Introduction

Concept introduction:

Saving: Saving is an income that is used by a consumer to spend for future consumption.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Answer question 2 only.

1. A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate fund, and the third is a (riskless) T-bill money market fund that yields a rate of 8%. The probability distributions of the risky funds have the following characteristics: Standard Deviation (%) Expected return (%) Stock fund (Rs) 20 30 Bond fund (RB) 12 15 The correlation between the fund returns is .10.

Frederick Jones operates a sole proprietorship business in Trinidad and Tobago. His gross annual revenue in 2023 was $2,000,000. He wants to register for VAT, but he is unsure of what VAT entails, the requirements for registration and what he needs to do to ensure that he is fully compliant with VAT regulations. Make reference to the Vat Act of Trinidad and Tobago and explain to Mr. Jones what VAT entails, the requirements for registration and the requirements to be fully compliant with VAT regulations.

Answer 2

Question

Chapter 24, Problem 1.1P

To determine

Saving and investment.

Expert Solution & Answer

Explanation of Solution

Saving is that part of annual disposable income which is used by a consumer to be spent for future consumption. It can be formulized as [S=(Y−T)−C]. Investment is the value of planned plant purchases, equipment purchases and inventories purchase by business firms. Equilibrium occurs at the point when the Income equal to Aggregate expenditure which equals the sum of consumption, government spending and investment (Y=AE=C+I+G) which can only occur if the leakages from circular flow (Savings (S) and Taxes (T)) are exactly matched by injections of demand (Investment (I) and Government spending (G)) i.e; (S+T=I+G). If the saving is greater than taxes and investment equals government spending, then, (S+T>I+G)

If leakages surpass injections, the aggregate expenditure would be lower than aggregate output (C+S+T≡Y>C+I+G) and as a result inventories will increase and the income (Y) will decline. Thus it will experience a recession.

If injections surpass leakages (G>T and S=I, S+T<I+G),the aggregate expenditure would be higher than aggregate output and as a result inventories will decrease and the income (Y) will increase.

Economics Concept Introduction

Concept introduction:

Saving: Saving is an income that is used by a consumer to spend for future consumption.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 24, Problem 1.1P

To determine

Saving and investment.

Expert Solution & Answer

Explanation of Solution

Saving is that part of annual disposable income which is used by a consumer to be spent for future consumption. It can be formulized as [S=(Y−T)−C]. Investment is the value of planned plant purchases, equipment purchases and inventories purchase by business firms. Equilibrium occurs at the point when the Income equal to Aggregate expenditure which equals the sum of consumption, government spending and investment (Y=AE=C+I+G) which can only occur if the leakages from circular flow (Savings (S) and Taxes (T)) are exactly matched by injections of demand (Investment (I) and Government spending (G)) i.e; (S+T=I+G). If the saving is greater than taxes and investment equals government spending, then, (S+T>I+G)

If leakages surpass injections, the aggregate expenditure would be lower than aggregate output (C+S+T≡Y>C+I+G) and as a result inventories will increase and the income (Y) will decline. Thus it will experience a recession.

If injections surpass leakages (G>T and S=I, S+T<I+G),the aggregate expenditure would be higher than aggregate output and as a result inventories will decrease and the income (Y) will increase.

Economics Concept Introduction

Concept introduction:

Saving: Saving is an income that is used by a consumer to spend for future consumption.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 24, Problem 1.1P

To determine

Saving and investment.

Expert Solution & Answer

Explanation of Solution

Saving is that part of annual disposable income which is used by a consumer to be spent for future consumption. It can be formulized as [S=(Y−T)−C]. Investment is the value of planned plant purchases, equipment purchases and inventories purchase by business firms. Equilibrium occurs at the point when the Income equal to Aggregate expenditure which equals the sum of consumption, government spending and investment (Y=AE=C+I+G) which can only occur if the leakages from circular flow (Savings (S) and Taxes (T)) are exactly matched by injections of demand (Investment (I) and Government spending (G)) i.e; (S+T=I+G). If the saving is greater than taxes and investment equals government spending, then, (S+T>I+G)

If leakages surpass injections, the aggregate expenditure would be lower than aggregate output (C+S+T≡Y>C+I+G) and as a result inventories will increase and the income (Y) will decline. Thus it will experience a recession.

If injections surpass leakages (G>T and S=I, S+T<I+G),the aggregate expenditure would be higher than aggregate output and as a result inventories will decrease and the income (Y) will increase.

Economics Concept Introduction

Concept introduction:

Saving: Saving is an income that is used by a consumer to spend for future consumption.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 24, Problem 1.1P

To determine

Saving and investment.

Expert Solution & Answer

Explanation of Solution

Saving is that part of annual disposable income which is used by a consumer to be spent for future consumption. It can be formulized as [S=(Y−T)−C]. Investment is the value of planned plant purchases, equipment purchases and inventories purchase by business firms. Equilibrium occurs at the point when the Income equal to Aggregate expenditure which equals the sum of consumption, government spending and investment (Y=AE=C+I+G) which can only occur if the leakages from circular flow (Savings (S) and Taxes (T)) are exactly matched by injections of demand (Investment (I) and Government spending (G)) i.e; (S+T=I+G). If the saving is greater than taxes and investment equals government spending, then, (S+T>I+G)

If leakages surpass injections, the aggregate expenditure would be lower than aggregate output (C+S+T≡Y>C+I+G) and as a result inventories will increase and the income (Y) will decline. Thus it will experience a recession.

If injections surpass leakages (G>T and S=I, S+T<I+G),the aggregate expenditure would be higher than aggregate output and as a result inventories will decrease and the income (Y) will increase.

Economics Concept Introduction

Concept introduction:

Saving: Saving is an income that is used by a consumer to spend for future consumption.

Answer 6

Chapter 24, Problem 1.1P

To determine

Saving and investment.

Expert Solution & Answer

Explanation of Solution

Saving is that part of annual disposable income which is used by a consumer to be spent for future consumption. It can be formulized as [S=(Y−T)−C]. Investment is the value of planned plant purchases, equipment purchases and inventories purchase by business firms. Equilibrium occurs at the point when the Income equal to Aggregate expenditure which equals the sum of consumption, government spending and investment (Y=AE=C+I+G) which can only occur if the leakages from circular flow (Savings (S) and Taxes (T)) are exactly matched by injections of demand (Investment (I) and Government spending (G)) i.e; (S+T=I+G). If the saving is greater than taxes and investment equals government spending, then, (S+T>I+G)

If leakages surpass injections, the aggregate expenditure would be lower than aggregate output (C+S+T≡Y>C+I+G) and as a result inventories will increase and the income (Y) will decline. Thus it will experience a recession.

If injections surpass leakages (G>T and S=I, S+T<I+G),the aggregate expenditure would be higher than aggregate output and as a result inventories will decrease and the income (Y) will increase.

Economics Concept Introduction

Concept introduction:

Saving: Saving is an income that is used by a consumer to spend for future consumption.

Answer 7

Chapter 24, Problem 1.1P

To determine

Saving and investment.

Answer 8

Expert Solution & Answer

Explanation of Solution

Saving is that part of annual disposable income which is used by a consumer to be spent for future consumption. It can be formulized as [S=(Y−T)−C]. Investment is the value of planned plant purchases, equipment purchases and inventories purchase by business firms. Equilibrium occurs at the point when the Income equal to Aggregate expenditure which equals the sum of consumption, government spending and investment (Y=AE=C+I+G) which can only occur if the leakages from circular flow (Savings (S) and Taxes (T)) are exactly matched by injections of demand (Investment (I) and Government spending (G)) i.e; (S+T=I+G). If the saving is greater than taxes and investment equals government spending, then, (S+T>I+G)

If leakages surpass injections, the aggregate expenditure would be lower than aggregate output (C+S+T≡Y>C+I+G) and as a result inventories will increase and the income (Y) will decline. Thus it will experience a recession.

If injections surpass leakages (G>T and S=I, S+T<I+G),the aggregate expenditure would be higher than aggregate output and as a result inventories will decrease and the income (Y) will increase.