Question
In: Economics
Suppose that investment is $160 billion, saving is $140 billion, government expenditure on goods and services...
Suppose that investment is $160 billion, saving is $140 billion, government expenditure on goods and services is $150 billion, exports are $200 billion, and imports are $250 billion. Is the government's budget exerting a positive or negative impact on investment? The government budget balance is a deficit or surplus, which is exerting a positive or negative impact on investment. It decreases or increases the demand for loanable funds, which _______ the real interest rate and ________ investment.
A. lowers; decreases B. raises; decreases C. raises; increases D. lowers; increases
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Income (Yd) Consumption Expenditure Saving Investment Expenditure Government Expenditure Net Export Expenditure Aggregate Expenditure $8000...
Income
(Yd)
Consumption
Expenditure
Saving
Investment
Expenditure
Government
Expenditure
Net Export
Expenditure
Aggregate
Expenditure
$8000
$11,000
$2,500
$5,000
$12,500
12,000
14,000
2,500
5,000
12,500
20,000
20,000
2,500
5,000
12,500
30,000
27,500
2,500
5,000
12,500
50,000
42,500
2,500
5,000
12,500
100,000
80,000
2,500
5,000
12,500
1. Calculate savings, autonomous consumption, MPC, MPS, break
even income, and the equilibrium level of income (Y = AE = C + I +
G + NX) in the above given information.
2. Draw a...
Income (Yd) Consumption Expenditure Saving Investment Expenditure Government Expenditure Net Export Expenditure Aggregate Expenditure $8000...
Income
(Yd)
Consumption
Expenditure
Saving
Investment
Expenditure
Government
Expenditure
Net Export
Expenditure
Aggregate
Expenditure
$8000
$11,000
$2,500
$5,000
$12,500
12,000
14,000
2,500
5,000
12,500
20,000
20,000
2,500
5,000
12,500
30,000
27,500
2,500
5,000
12,500
50,000
42,500
2,500
5,000
12,500
100,000
80,000
2,500
5,000
12,500
Calculate savings, autonomous consumption, MPC, MPS, break even
income, and the equilibrium level of income (Y = AE = C + I + G +
NX) in the above given information.
Draw a graph showing...
suppose private saving in a closed economy is $12 billion and investment is $10 billion. Which...
suppose private saving in a closed economy is $12 billion and
investment is $10 billion. Which of the following are true?
A. national saving must equal $12 billion
B. public saving must equal $2 billion
C. Government budget surplus must equal $2 billion
D. Government budget deficit must equal $ 2 billion
Income (Yd) Consumption Expenditure (C) Saving (S) Investment Expenditure (I) Government Expenditure (G) Net Export...
Income
(Yd)
Consumption
Expenditure
(C)
Saving
(S)
Investment
Expenditure
(I)
Government
Expenditure
(G)
Net Export
Expenditure
(NX)
Aggregate
Expenditure
(AE)
$8000
$11,000
$2,500
$5,000
$12,500
12,000
14,000
2,500
5,000
12,500
20,000
20,000
2,500
5,000
12,500
30,000
27,500
2,500
5,000
12,500
50,000
42,500
2,500
5,000
12,500
100,000
80,000
2,500
5,000
12,500
1.
Calculate: Savings, MPC, MPS, Multiplier, and the equilibrium level
of income (Y = AE = C + I + G + NX).
2. Draw a graph showing disposable...
Suppose that for a particular economy and period, investment was equal to 100, government expenditure was...
Suppose that for a particular economy and period, investment was
equal to 100, government expenditure was equal to 75, net taxes
were fixed at 100, and consumption (C) was given by the consumption
function C = 25 + 0.8YD where YD is disposable income and Y is
GDP.
a. What is the level of equilibrium income (Y).
b. What is the value of the government expenditure multiplier?
Of the tax multiplier?
c. Suppose that investment declined by 40 units to...
1. Saving and Investment (a). Consider the consumption expenditure function ? = ?̅ + ?(? −...
1. Saving and Investment
(a). Consider the consumption expenditure function
? = ?̅ + ?(? − ?, ?)
In each sentence below, fill in the blank with either:
increasing, decreasing, or constant. Consumption is a/an
__________________ function of disposable income. Consumption is
a/an __________________ function of the real interest rate.
(b). National saving can be written as
?=?−?−?
Substitute the consumption expenditure function from part (a)
into this equation. That is, write an equation for saving S that
depends on...
Suppose GDP is $800 billion, taxes are $150 billion, private saving is $50 billion, and public...
Suppose GDP is $800 billion, taxes are $150 billion, private
saving is $50 billion, and public saving is $20 billion. Assuming
this economy is closed, calculate consumption, government
purchases, national saving, and investment.
i. suppose national saving is $100b, the government deficit is $15b, and the gross investment is...
i. suppose national saving is $100b, the government deficit is
$15b, and the gross investment is $130b. foreign financing is:
a. $30b or less
b. more than $30b but not more than $40b
c. more than $40b but not more than $50b
d. more than $50b
ii. the bank of Canada can pay for its bond purchase simply by
crediting the amount of its purchase to the account of the bank
involved in the transaction. as a result:
a. bank...
Suppose that investment demand increases by $700 billion in a closed and private economy (no government...
Suppose that investment demand increases by $700 billion in a
closed and private economy (no government or foreign trade). Assume
further that households have a marginal propensity to consume of 90
percent.
(a) Compute four rounds of multiplier effects.
Instructions: Enter your responses rounded to the
nearest one decimal place.
Changes in This
Cycle's Spending
(in billions)
Cumulative Change
in Spending
(in billions)
First cycle
700.0
700.0
Second cycle
Third cycle
Fourth cycle
(b) What will be the final cumulative...
Suppose that call options on a stock with strike prices $120, $140 and $160 cost $13,...
Suppose that call options on a stock with strike prices
$120, $140 and $160 cost $13, $14 and $18, respectively. How can
the options be used to create a Butterfly spread?
Call 1 – Strike $120: Position Long or
short?__________
Call 2 – Strike $140: Position Long or
short?__________
Call 3 – Strike $160: Position Long or
short?__________
I. Explain
how you can built the spread and write a table that shows the
profit and payoff for each option and...
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