Question

In: Economics

The aggregate savings in an economy is $1,750 and the GDP of the economy is $55,000....

The aggregate savings in an economy is $1,750 and the GDP of the economy is $55,000. The savings rate in the economy is:

A. 1.8%.

B. 3.15%.

C. 8.96%.

D. 10%.

Consider a closed economy without the government. If the GDP of the economy is $25,000 and the savings rate in the economy is 25%, the aggregate savings in the economy is:

A. $3,320.

B. $6,250.

C. $8,000.

D. $8,650.

Consider a closed economy without the government. If the savings rate in the economy is 15% and the aggregate savings is $6,000, the GDP of the economy is:

A. $15,000.

B. $27,000.

C. $30,000.

D. $40,000.

Consider a closed economy without the government. If the savings rate in the economy is 20% and the aggregate savings is $10,000, the aggregate consumption in the economy is:

A. $10,000.

B. $37,000.

C. $50,000.

D. $45,000

Solutions

Expert Solution

1. Correct option is B. 3.15 %

Savings rate = aggregate savings ÷ GDP

= (1750 ÷ 55000 )*100= 3.18

2. Correct option is B. $6250

Aggregate savings = GDP × savings rate

= 25000×(25÷100) = 6250

3. Correct option is D. $40000

GDP = aggregate savings ÷ savings rate

= 6000 ÷ (15/100) = 6000 × (100 ÷ 15)= 40000

4. Correct option is C. $50000

Aggregate consumption = GDP = aggregate savings ÷ savings rate

= 10000 ÷ (20/100) = 10000 × (100/20) = 50000

Rahul Sunny answered 1 year ago

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