iven the following on a closed economy. C = 40 + 0.8Yd C= consumption I = 55 – 200r I= Investment G = 20 G = government spending T = 20 T = Taxes Ye = 400 Ye = National Income r = rate of interest Determine the following: The level of Private savings The level of Public savings The level of national savings

iven the following on a closed economy. C = 40 + 0.8Yd C= consumption I = 55 – 200r I= Investment G = 20 G = government spending T = 20 T = Taxes Ye = 400 Ye = National Income r = rate of interest Determine the following: The level of Private savings The level of Public savings The level of national savings

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Savings,investment And The Financial System

Section: Chapter Questions

Problem 5PA

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Question

Given the following on a closed economy.

C = 40 + 0.8Yd C= consumption

I = 55 – 200r I= Investment

G = 20 G = government spending

T = 20 T = Taxes

Ye = 400 Ye = National Income

r = rate of interest

Determine the following:

The level of Private savings

The level of Public savings

The level of national savings

Definition Definition Income earned by a government that is not spent on current expenses, but rather saved for future investments or to pay off debts. It is the difference between government revenue and expenditures, and can be positive or negative.

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