Question 2 Suppose the economy of Oforikrom, an island is described by the following C = 100+ 0.75Yd I: = 75 G = 50 T = 0.2Y TR = 100 Where C-consumption, I= investment, G-government spending, T= taxes and TR= transfer payment. Use this information to answer the following questions a. Compute private saving, b. Calculate the public saving and national saving. c. Compute the government spending multiplier and the tax multiplier and explain what each means d. Find the equilibrium level of national income. e. Now suppose government spending doubles. Compute private saving, public saving, and national saving. f. Find the new equilibrium level of national income. g. Suppose the tax function is now T = 50+ 0.2Y find the equilibrium output h. From your answer above, determine the output gap if full employment out is GH1500 i. What amount of government spending will yield an equilibrium income of Gh1500 using the values of the components of aggregate demand given at the beginning of the question.

Question 2 Suppose the economy of Oforikrom, an island is described by the following C = 100+ 0.75Yd I: = 75 G = 50 T = 0.2Y TR = 100 Where C-consumption, I= investment, G-government spending, T= taxes and TR= transfer payment. Use this information to answer the following questions a. Compute private saving, b. Calculate the public saving and national saving. c. Compute the government spending multiplier and the tax multiplier and explain what each means d. Find the equilibrium level of national income. e. Now suppose government spending doubles. Compute private saving, public saving, and national saving. f. Find the new equilibrium level of national income. g. Suppose the tax function is now T = 50+ 0.2Y find the equilibrium output h. From your answer above, determine the output gap if full employment out is GH1500 i. What amount of government spending will yield an equilibrium income of Gh1500 using the values of the components of aggregate demand given at the beginning of the question.

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

See similar textbooks

Similar questions

What is national saving? What is privet saving ?what is public saving? How are these three variables related?
Please take your time to help me because so many answers are wrong. Help with b, c and dConsider an economy described by the following equations:Y=C + I +GY=7,000G=4000T=2,000C=150+0.75(Y-T)I=1,000-50ra. In this economy, compute private saving, public saving and national saving.b. Calculate the equilibrium interest rate. include a graph to support answerc. Now suppose the G rises by 1,000. Compute private saving, public saving, andnational saving. Include a graph to support answerd. Calculate the new equilibrium interest rate. include a graph to support answer
The table below shows aggregate values for a hypothetical economy. Suppose this economy has real GDP equal to potential output. Potential GDP $14 000 Government purchases $2100 Investment $300 Consumption $10 000 Net tax revenues $2000 Refering to the table above, what is th eprivate saving for this economy?
Explain the difference between saving andinvestment as defined by a macroeconomist. Whichof the following situations represent investment andwhich represent saving? Explain.a. Your family takes out a mortgage and buys a newhouse.b. You use your $200 paycheck to buy stock in AT&T.c. Your roommate earns $100 and deposits it in hisaccount at a bank.d. You borrow $1,000 from a bank to buy a car to usein your pizza delivery business.
View History Bookmarks Tools Window Help Coy, Jonnifer - Outlo X C Martin County School District X S MyPath - Home Content https://ezto.mheducation.com/ ext/map/index.html?_con%3Dcon&external_browser%3D0&launchUrl=https%25 Saved Level of Output and Income (GDP= DI) Consumption Saving APC APS MPC MPS S480. $-16 520 560 16 60 32 640 48 680 64 720 80 760 96 800 112 Des Instructions: Enter your answer as a whole number. b. What is the break-even level of income in the table? What is the term that economists use for the saving situation shown at the $480 level of income? (Click to select) Y c. For each of the following items, indicate whether the value in the table is either constant or variable as income chanc The MPS: (Click to select) The APC: (Click to select) The MPC: (Click to select) The APS: (Click to select) aw Prev 1 of 1 JAN 11 %24
a. If national saving of a closed economy equals$100,000, net taxes equal$125,000,GDPdeflator is 175 and government expenditure equals$45,000, what is private saving?