use the data to calculate the following. (Set desired national saving and desired investment equal, and solve for … Assume that government expenditure is constant at $200 million. If the government eliminates a tax credit for investment, then the equilibrium real interest rate will ___ and the equilibrium quantity of saving and investment will __-. 2.5 b. In a closed economy, saving equals investment and (Y - C- G) and (private saving = public saving). Based on the information above, what is the level of private saving in the economy? Consider the following data for a closed economy;? Consider the following data for a closed economy: Y = $11 Trillion C = $8 Trillion I = $2 Trillion TR = $1 Trillion T= $3 Trillion Use these data to calculate the following: a. C = $9 trillion. Problem 2.6: Consider an economy that produces and consumes bread and automobiles. Over time, the U.S. economy has experienced constant economic growth. Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion Refer to Scenario 10-1. In fact, it believes it does not need to trade. Consider the following data for a one-factor economy. In macroeconomics, the purchase of stocks and bonds is called saving, and the purchase of new machinery and equipment is called investment. 2. Answer Save. Scenario 6.1 Consider the following data for a closed economy: Y = $1 200 billion C = $800 billion I = $200 billion G = $200 billion TR = $200 billion T = $300 billion 11) Refer to Scenario 6.1. C. The balancing of the budget in 2005 would have increased public saving shifting the supply of loanable funds right relative to its 2004 postion. Consider the following data for a closed economy: Y $12 trillion C $8 trillion G $2 trillion Spublic $-0.50 trillion T $2 trillion Now suppose that government purchases increase from $2 trillion to $2.60 trillion but the values of Y and C are unchanged. True. The real interest rate reflects the true return to lending/ saving and the true cost of borrowing because it is adjusted for inflation. b. Private Saving (Individuals)=Y(Income)+ Transfer Payment)-T(Taxes)-C(consumption). 2.0 c. Transfer payments are: $ trillion. Posted at 02:45h in Articles by magic writer in Articles by magic writer The government budget deficit or budget surplus, a) $=\mathrm{Y}+\mathrm{TR}-\mathrm{C}-\mathrm{T}$$=\$ 11$ trillion $+\mathrm{Sl}$ trillion $-$ S8 trillion $-\mathrm{S} 3$ trillion$=$ S1 trillionb) $=\mathrm{I}-\mathrm{S}_{\text { private }}$$=\$ 2$ trillion - S1 trillion$=\$ 1$ trillionc) $\begin{aligned} \mathrm{I} &=\mathrm{Y}-\mathrm{C}-\mathrm{G} \\ \mathrm{G} &=\mathrm{Y}-\mathrm{C}-\mathrm{I} \\ &=\mathrm{S} 11 \text { trillion }-\mathrm{S8} \text { trillion }-\mathrm{S} 2 \text { trillion } \\ &=\mathrm{S} 1 \text { trillion } \end{aligned}$Thus, government purchases will be equal to $\$ 1$ trilliond) $=\mathrm{T}-\mathrm{G}-\mathrm{TR}$$=\mathrm{S} 3$ trillion $-\mathrm{S} 1$ trillion $-\mathrm{S} 1$ trillion$=$ S1 trillion, Economic Growth, the Financial System, and Business, Saving, Investment, and the Financial System. 3. transfer payments. T= 2 trillion . Which of the following does not decrease during a recession? Savers prefer to buy bonds when their interest rates are low. All portfolios are well diversified. Problem 2.6: Consider an economy that produces and consumes bread and automobiles. The country claims that it produces everything its citizens need. E. Holding all else constant an decrease in saving by household (B) shift the supply of loanable funds left, increasing the equilibrium real interest rate. Unemployment rate= Number Unemployed/ labor Force. All portfolios are well diversified.Suppose that another portfolio, portfolio E, is well diversified with a beta of .6 and expected return of 8%. Government purchases and taxes are both 100. In the following table are data … Business cycle are regular and predictable. Government purchasesd. a. Also assume that there is equilibrium in the goods market at all times. Banks pay higher interest rates to savers than they receive from borrowers. Suppose that another portfolio, portfolio E, is well diversified with a beta of .6 and expected return of 8%. False. A closed economy is a country that does not import or export. If the government decrease the tax rate on interest income, the the equilibrium real interest rate will _____ and the equilibrium quantity of saving and investment will ____. Use the data provided to calculate the level of private saving and the level of public saving and demonstrate their relationship to investment. All portfolios are well diversified. (1) deficit surplus Consider the following data for a closed economy: Y = $ trillion 14 C = $ trillion 9 G = $ trillion 3 S public = $ trillion − 0.5 T = $ trillion 4 Use the data to calculate the following: (Enter your responses rounded to one decimal place.) An increase in government purchases financed by borrowing. B) 0.5. We all know the three variables on the right side so that we can just plug this in, and we can then calculate how much money the government spends, which turns out to also be one truly dog party assets to find the government budget deficit or the budget surplus, which I'll just label as B. Thus letting Y stand for GDP results in: Y = C + I + G + NE In this example we will consider the closed economy which assumes that a country does not engage in trade. A firm revives funds only when a share of its stock is sold for the first time in a primary market. True. 11ea71cb_f343_869b_91e5_a3caf3a0e676_TB5441_00_TB5441_00 TABLE 4-5 -Refer to Table 4-5.The cross-price elasticity of demand for transit passes in terms of the price of gasoline is _____.A rise in the price of gasoline causes the demand curve for transit passes to shift to the _____. Based on the information above, what is the level of private saving in the economy? b.C = $8 trillion . C. This is why stock indexes are a leading economic indicator. B. 1. 1. False. We know that public savings is also $1 trillion. Perp. Y=C+I+G+NX(0). Holding all else constant, an increase in investment by firms (C) will shift the demand for loanable funds right, increasing the equilibrium real interest rate. Consider a fixed price model of a closed economy. Consider the following IS-LM model for a closed economy. 1.5 d. (Enter your responses as integers.) The LM curve represents the relationship between liquidity and money. Savers prefer to buy bonds when their interest rates are HIGH because savers receive interest from bonds. Holding all else constant, which of the following would you expect to increase the equilibrium real interest rate? The income elasticity of demand for gasoline in this economy is A) 6.0. (20 points) Consider the standard closed economy full employment model that we have studied – sometimes called the loanable funds model. The demand for loanable funds comes from investors and the supply of loanable funds comes from savers. That's why, because that is the GDP and the amount of income that is earned the entire economy adding transfer payments because that's how much money the government gives consumers subtracting consumer spending, which is how much money they spend on good and services. Consider a closed economy of AU land that can be described by the following functions: All values C, I, and G are in billions of USD. Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion G = $2 trillion SPublic = $-0.5 trillion T = $2 trillion Use these data to calculate the following: a. Public savingc. Wrexington is a closed economy that has collected the following data: Y = $20 trillion, C = $12 trillion, I = $3 trillion, TR = $1 trillion, and T = $7 trillion. Would an arbitrage opportunity exist? Macroeconomic Calculations and Production Fluctuations (version A) 1. Under which of the following circumstances would the government be running a budget deficit? 1. a. Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion Refer to Scenario 10-1. View Solution: Consider the following data for a one factor economy All Read More Consider the following data for a hypothetical economy. A decrease in autonomous savings at each level of disposable income will A) shift the LM curve down. Y= 12 trillion. Consider the following data for a closed economy: Y $12 trillion C $8 trillion G $2 trillion Spublic $-0.50 trillion T $2 trillion Now suppose that government purchases increase from $2 trillion to $2.60 trillion but the values of Y and C are unchanged. First is private savings. A budget deficit is a negative number that indicates the govern…, The total public debt $D$ (in trillions of dollars) in the United States fro…, Economists in Funlandia, a closed economy, have collected the following info…, Suppose that this year's money supply is \$500 billion, nominal GDP is …, The following graph approximates the federal deficit of the United States. Suppose that T = G= 450 and that M= 9000. 27 Jul. (15 points) For each of the following, draw into the diagram provided how the curve or curves should shift in the IS-LM model of a closed economy with fixed prices, and explain in a sentence or two the reason(s) for the shift(s). During the early stages of a recovery from a recessioon, firms increase the hours of their existing work force before they hire new workers. Public saving c. Government purchases d. The government budget deficit or budget surplus Consider the following data for a closed economy: Y = $11 trillion C = $8 trillion I = $2 trillion TR = $1 trillion T = $3 trillion Use the data above to calculate the following: Private saving Public saving Government purchases Government budget deficit or surplus 2. In macroeconomics, we often assume the U.S. economy is a closed economy when building models that describe how changes in policy and shocks affect the economy. The nominal interest rate reflects the true return to lending/saving and the true cost of borrowing. Consider the following data for a closed economy: Y = $15 trillion C = $8 trillion I = $2 trillion TR = $2 trillion T = $2 trillion Use the data to calculate the following. Consider the following data for a closed economy: Y = $11 trillion C = $8 trillion I = $2 trillion TR = SI trillion T = S3 trillion Use these data to calculate the following: Private saving Public saving Government purchases The government budget deficit or budget surplus Consider the following data for a closed … During recessions, the inflation rate usually falls in response to weak demand for consumer goods, and the interest rate usually falls in response to weak demand for investment. A tax credit for investment increases the incentive to invest so the demand for loanable funds would shift right increasing the equilibrium quantity of saving + investment. 108724 Questions; 110428 Tutorials; 96% (4113 ratings) Feedback Score View Profile. U…, The bar graph shows that in 2000 and 2001 , the U.S. government collected mo…, EMAILWhoops, there might be a typo in your email. a. Private saving b. 2.investmant spending. Consider the following data for a hypothetical economy. All portfolios are well diversified. in order to increase the stock of money in the economy. In the following table are data for two different years: Year 2000 2010 Price of an automobile USD 50,000 USD 60,000 Price of a loaf of bread USD 10 USD 20 Number of automobiles produced 100 120 C) 0.6. C) shift the IS curve to the left. Consider the following data for a closed economy: Y=\ 12 trillion C=\ 8 trillion G=\ 2 trillion S_{\text { Public }}=\-0.5 trillion T=\ 2 trillion Use these da… The Study-to … In the following table are data … … e.T = $3 trillion . Use these data to calculate the following: a. A firm receives funds every time a share of its stock is sold. Holding all else constant, this would have caused the __ loanable funds to shift __ in 2005. 30. This will decrease i. Stock indexes, such as the Dow Jones Industrial Average, typically _____ before the beginning of a recession and _____ before the beginning of an expansion. In a closed​ economy, the values for​ GDP, consumption​ spending, investment​ spending, transfer​ payments, and taxes are as​ follows: Y​ = $11 trillion C​ = $8 trillion A bond is a financial security that represents a promise to repay a fixed amount of funds. Banks pay lower interest rates and use the difference to cover expense and generate profit. Holding all else constant, which of the following is incorrect? What is Wrexington's private saving? Ans: Government purchases are Y = $15 trillion. Public Saving C. Goverment Purchases D. The Goverment Budget Deficit Or Budget Surplus Part B. Pay for 5 months, gift an ENTIRE YEAR to someone special! Which of the following would encourage economic growth through an increase in the economy's quantity of saving and investment? The inflation rate and the interest rate both tend to rise during expansions and fall during recessions. So we know that whether or not the government has a deficit, re surplus is dependent upon how much revenue, the urn and how much money they spend. Consider the following data for a closed economy:$Y=\$ 12$ trillion$…, Suppose GDP is $\$$8 trillion, taxes are $\$$1.5 trillion, private saving is…, An economy is in a recession with a large recessionary gap and a government …, U.S. Budget. S public= -0.5 trillion. A) $3 trillion B) $4 trillion C) $5 trillion D) $8 trillion So how much revenue the Aaron is equal to tax reform, which is how much money they get from consumers by taxing them. E) 1.2. We get that the government actually has a surplus of $1 trillion because they earn more revenue taxes and they spend through transfer payments or other government creditors. G= 2 trillion. Suppose that T = G = 450 and that M = 9000. 17) Refer to Table 4-4. Private saving=Y+TR-C-T=12+2-8-3+$3 TRILLION, D. Public Saving= T-G-TR=3-2-2=$-1 trillion, B. Investment= Y-C-G=10-5-2=$3 TRILLION. Question: Part A. Figures are in billions of dollars. And so for this part, we're gonna use the savings equals investment rule, which says that the sum of public and private savings is equal to total amount of investment spending. ??=?? In the closed economy scenario, Low-Income region and China start with higher interest rates at around 5.7% and 8.2%, respectively. What is Wrexington's public saving. We also need to spend their subtract government expenditures. Over time, the U.S. economy has experience economic growth but has not been constant due to the business cycle. Macroeconomic Calculations and Production Fluctuations (version A) 1. False. Draw a graph illustrating the determination of the real rate of interest, as described by that model. Consider the following data for a closed economy:? Solution for Consider the following data for a closed economy: Y = $12 trillion C = $9 trillion G = $2 trillion %3D %3D = $-1.0 trillion public T= $3 trillion… Consider the following model of a closed economy: 10. Consider the following data for a closed economy: Y = $11 trillion C = $8 trillion I= 2 trillion TR = 1 trillion T= 3 trillion Use these data to calculate the following: a.Private saving b.Public saving c.Government purchases d.The government budget deficit or budget surplus How do I … False. FAlse. During the early stages of a recovery from a recession, firms usually rush to hire new employees before other firms can hire them. Consider the following closed economy a Suppose that T G Consider the following closed economy: a. In a completely closed economy, there are no imports or exports. Consider the following data for a closed economy: A. 1. Bonds: Interest Rates. True During expansions, the inflation rate usually rises in response to strong demand for consumer goods, and the interest rate usually rise in response to strong demand for investment. 4) Consider the economy of Slugikistan. Consider the following data for a closed economy: Y $12 trillion C $8 trillion G $2 trillion Spublic $-0.50 trillion T $2 trillion Now suppose that government purchases increase from $2 trillion to $2.60 trillion but the values of Y and C are unchanged. Based on the information above, what is the level of private saving in the economy? Jl portfolios are well diversified. D. The elimination of a tax credit for investment will reduce the incentive to invest so the demand for loanable funds will shift left. The demand for loanable funds comes from savers, and the supply of loanable funds come from investors. Solved Expert Answer to Consider the following data for a one-factor economy. p The interest rate is lowest in High-Income countries to begin with. 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