Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
Textbook Question
Book Icon
Chapter 31, 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
Check Mark
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..

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
2.) Using the line drawing tool​, plot and label the isocost line.   Carefully follow the instructions​ above, and only draw the required objects.   FILL IN BLANK  d. Now suppose the price of labour rises to​ $5 per​ unit, but the firm still wants to produce 500 tires per day. Explain how a​ cost-minimizing firm adjusts to this change​ (with no change in​ technology).   A​ cost-minimizing firm will be producing on ▼  The samedifferently slopedparallel   isocost line. The firm will use ▼  moresameless   labour and ▼  less the same amount of more capital and produce on ▼   a higher point on the same a lower point on the same a lower a higher isoquant curve.
QK Using the graph on the right, determine how the firm should change the quantity of the production factors in order to reduce the costs. The firm that is producing at point A can reduce its costs for producing 2000 units by employing A. same capital and more labour. B. less capital and more labour. ○ C. less capital and the same labour. D. more capital and more labour. OE. more capital and less labour. C A B Q =4000 Q = 2000 C Isocost line QL
PL Suppose the price ratio is the same along isocost PK lines A and B. In the figure at right, the difference between isocost line A and isocost line B is that A. the total cost is larger along B. B. the total cost is larger along A. OC. labour is relatively more expensive along A. ○ D. the level of output is lower along A. OE. both capital and labour are relatively cheaper along A. Capital B Labour

Chapter 31 Solutions

Principles of Economics 2e

Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Text book image
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Text book image
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Text book image
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Text book image
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Macroeconomics
Economics
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Cengage Learning