Consider an economy described as follows:
Y = C + I + G.
Y = 5,000.
G = 1,000.
T = 1,000.
C = 250 + 0.75(Y – T).
I = 1,000 – 50 r.
In this economy, compute private saving, public saving, and national saving.
Private Saving =
Public Saving =
National Saving =
Consider an economy described as follows:
Y = C + I + G.
Y = 5,000.
G = 1,000.
T = 1,000.
C = 250 + 0.75(Y – T).
I = 1,000 – 50 r.
Find the equilibrium interest rate.
The equilibrium interest rate is equal to .
Consider an economy described as follows:
Y = C + I + G.
Y = 5,000.
G = 1,000.
T = 1,000.
C = 250 + 0.75(Y – T).
I = 1,000 – 50 r.
Now suppose that G rises to 1,250. Compute private saving, public saving, and national saving.
Private Saving =
Public Saving =
National Saving =
Consider an economy described as follows:
Y = C + I + G.
Y = 5,000.
G = 1,000.
T = 1,000.
C = 250 + 0.75(Y – T).
I = 1,000 – 50 r.
Now suppose that G rises to 1,250. Find the new equilibrium interest rate.
The equilibrium interest rate is equal to .