An economy has full-employment output of 6,000. Government purchases, G, are 1,000. Desired consumption and desired investment are cd=3,800-2,000r+0.25Y, and = 1,200-3,000r. where Y is output and r is the real interest rate. a. Find an equation relating desired national saving, s, to rand Y. Sd=+r+y
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- An economy has full-employment output of 6,000. Government purchases, G, are 1,000. Desired consumption and desired investment are cd=3,800-2,000r +0.25Y, and P=1,200-3,000r, where Y is output and r is the real interest rate. a. Find an equation relating desired national saving, S, to r and Y. S=+r+YConsider the following functions for consumption and investment: C = 1,000 + (2/3)*(Y – T) and I = 1,200 – 100*r. Furthermore, Y = 8,000, G = 2500, T = 2,000. Compute private, public, and national savings for this economy, and find the equilibrium real interest rate (r). Assume that G declines by 500 units. How will it change your answers in part (a)? What happens to the national savings, given everything else, if the public decides to consume less out of their disposable income (assume that the propensity of consume falls by 10 percent)? Given your answer in part (c), what happens to investment and real interest rate? Answer all four.An economy has government purchases of 2000 (G=2,000). Desired national saving and desired investment are given by Sd = 200 + 500Or + (0.1Y) - (0.2G) Id = 1000 - 4000r When the full-employment level of output equals 5000, A. What is the equilibrium real interest rate? B. What is the equilibrium level of desired Investment? c. What is the equilibrium level of consumption?
- Given the following informations; Consumption(C) 800+0.9Y, Where Y-Income Investment (I) =8000-800r, where r=interest rate Money Supply (Ms) =28500 Demand for Money (Md) =0.75Y-1500r and if the autonomous Investment decreased then %3D income decreased and interest rate increased. income increased and interest rate decreased. O income decreased and interest rate decreased income increased and interest rate increasedAn economy has full-employment output of 9000, and government purchases are 2000. Desired consumption and desired investment are as follows: Real Interest Desired Desired Rate (%) Consumption Investment 2 6100 1300 6000 1200 4 5900 1100 5 5800 1000 6 5700 900 If the goods market is in equilibrium, what are the values of the real interest rate, desired national saving, and desired investment? r = %. (Enter your answer as a whole number.) (Enter your answer as a whole number.) %3DAn economy has full-employment output of 9000, and government purchases are 2000. Desired consumption and desired investment are as follows: Find desired national saving for each value of the real interest rate. Enter your answers in the table below. Real Interest Rate (%) 2 3 4 5 6 (Enter your answer as a whole number.) Desired Consumption 6100 6000 5900 5800 5700 Desired Investment 1500 1400 1300 1200 1100 If the goods market is in equilibrium, what are the values of the real interest rate, desired national saving, and desired investment? r= %. (Enter your answer as a whole number.) so = Desired Saving
- An economy has full-employment output of 6,000. Government purchases, G, are 1,200. Desired consumption and desired investment are C° = 3,600 – 2,000r + 0.10Y, and P = 1,200 - 2,000r, %3D %3D where Y is output and r is the real interest rate. a. Find an equation relating desired national saving, S", to r and Y. sd = + r +If the consumption function is C = C (Y - T) = 0.75 (Y - T) and there is an increase in output of 200 million and an increase in taxes by 100 million, holding all else constant, what is the change in national savings? $300 million -$125 million $225 million $125 millionIf business managers become more optimistic about future sales and profits, then there will be O no movement along or shift of the investment function an upward shift of the investment function a downward shift of the investment function a leftward movement along the investment function O a rightward movement along the investment function Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
- In an economy the interest rate is 5% and the depreciation rate is 20%. The price of capital is 1. A firm has the following production function Y=AKO5N0.5 a. Find the marginal cost of capital b. Compute the investment desired by the firm, knowing that A=2, K=8, N=1. c. If the economy is a close economy, what is the amount of national savings? Instead, what if this was an open economy? Explain. d. If the government imposes a tax on firm revenues of 25%, how does the investment desired change? Compute it and show what happens in the Investment-Savings diagram, assuming this is an open economy and the government completely waste the revenues of this tax.How will planned investment spending change as the following events occur? a) The interest rate falls as a result of Federal Reserve policy. b) The U.S. Environmental Protection Agency decrees that corporation must upgrade or replace their machinery in order to reduce their emissions of sulfur dioxide. c) Baby boomers begin to retire in large number and reduce their savings, resulting in higher interest rates. Thank you very much for your help.Suppose GDP is $10,000 trillion, taxes are $1,500 trillion, consumption is $6,000 trillion, and government expenditure is $1,700 trillion. Investment is a function of the interest rate such that it is represented by the following equation (in trillions): ? = 3,300 − 100 ∗ ?Where i is the world real interest rate, expressed as a percentage. Us this information to calculate private savings, public savings, national savings, and the equilibrium real interest rate.