Suppose GDP is $8 trillion, taxes are $1.5 trillion, private saving is $0.5 trillion, and public saving is $0.2 trillion. Assuming this economy is closed, calculate consumption, government purchases, national saving, and investment. а.
Q: Show the solution. Suppose GDP equals $30 trillion, consumption equals $20 trillion, the government…
A: Given GDP = $30 trillion. Consumption = $20 trillion. Government spending = $4 trillion. Budget…
Q: In a closed economy, the gross domestic product is $25,000, consumption is $8,200 and taxes are…
A: Answer to the question is as under:
Q: Which of the following best describes the catch-up effec O It is easier for a country to grow fast…
A: There exists diminishing returns to capital, that is after a certain point, increase in capital will…
Q: Fill in the blanks: The following shows information of a hypothetical economy in a given year.…
A: Y=Consumption+Investment+Government purchase+Net Exports Y=350+100+125+(60-50)Y=575+10Y=585
Q: Suppose GDP is $10 trillion, taxes are $2.5 trillion, private saving is $1.5 trillion, and public…
A: In a closed economy, GDP is the sum of the consumption, government purchase and investment and that…
Q: Determine the amount of national income. b. Determine the amount of national consumption. c.…
A: National Income is sum of consumption and investment. Y = C + I, where Y = National Income , C =…
Q: Suppose GDP is $12 trillion, taxes are $3.6 trillion, private saving is $1.5 trillion, and public…
A: GDP can be found out by the sum of these three components: Where, C is the consumption I is the…
Q: Suppose GDP is Rs.8 trillion, taxes are Rs.1.6 trillion, private saving is Rs.0.5 trillion, and…
A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…
Q: What is investment? How is it related to national saving?
A: Investment refers to an action of purchasing assets or goods that are not consumed in the present…
Q: Suppose GDP in this country is $900 million. Enter the amount for consumption. Value National Income…
A: GDP in an economy can be calculated using following formula:
Q: Suppose that GDP is $8 billion, taxes are $1.5 billion, private saving is $0.5 billion, and public…
A: Aggregate expenditure is the sum of consumption, investment and government spending in a closed…
Q: During recessions declines in investment account for abouta. 1/6 of the decline in real GDP.b. 1/3…
A: Recession is a slowdown or a massive contraction in economic activities. Recession is caused by a…
Q: What is the impact on the national saving rate if the consumption and government share each increase…
A: Answer in step 2.
Q: Suppose GDP = $9.0 trillion C= $5.0 trillion G= $2.0 trillion T-G = $300 billion With the…
A: Y = C + I + G + NX Where, Y = GDP, C = Consumption, G = Government Purchases, NX = Net Exports ie…
Q: Consider an economy in which GDP is $30 billion. Tax revenue is $7 billion, consumption is $15…
A: Given information: GDP (Y) is $30 billion Tax revenue (T) is $7 billion Consumption (C) is $15…
Q: = $1 trillion, Consider a closed economy in which C = $345 billion, G = $350 billion, and T = $100…
A: In closed economy Y= C+ I+ G to calculate overall level of saving Y - C -G = I ( since saving =…
Q: Economists from Funlandia have collected the following information about the economy (all measured…
A: At equilibrium, Y = C+I+G Y = 9+2-0.5r+2.5 12 = 13.5-0.5r -1.5 = 0.5r r = 3% Therefore, real rate of…
Q: Consider an economy in which GDP is $8.2 trillion, public saving is -$0.2 trillion, taxes are $0.9…
A: Economy means managing the available resources carefully.
Q: Consider a closed economy without a government. If the GDP of the economy is $63,000 and the…
A: Equilibrium without government is at Y= C + I Y= income C= consumption I= investment
Q: Investment in an economy increases by $1,000 million. Suppose marginal propensity to save is zero.…
A: # We know well that the value of multiplier is given as:- k = 1/MPS Also the multiplier is also…
Q: Given the following on a closed economy. C = 40 + 0.8Yd I= 55 – 200, C= consumption I= Investment G…
A:
Q: suppose that in a closed economy GDP is equal to 22,000, taxes are equal to 7000, consumption is…
A: Given, GDP (Y) = 22,000 Taxes (T) = 7000 Consumption (C) = 13,000 Government expenditure (G) = 4000
Q: Explain and compare the following terms: Saving intensity and break-even investment intensity.
A: In economics, saving is defined as the process a specific percentage of the annual income, which is…
Q: What happens in a private closed economy when aggregate expenditures exceed GDP? a. GDP will…
A: In a closed economy with no government GDP is given by, Y=C+I
Q: What is an investment? How is it related to national saving? Write the National Income Accounts…
A: Investment refers to that asset which is obtained for the purpose of generating income. Investment…
Q: The following national accounting data are available for an economy for 2020. $ Billion GDP 950…
A: The income which would result in the national income as a result the savings would result in the…
Q: Ceteris paribus, in a closed economy, if consumers become more pessimistic. O autonomous consumption…
A: In a closed economy, if the consumer becomes more pessimistic about the future, he will reduce the…
Q: In a closed economy with no government, aggregate expenditure is O saving plus investment.…
A: A closed economy is a type of economy where the import and export of goods and services don't…
Q: Suppose GDP is $9 trillion, taxes are $1.9 trillion, private saving is $0.6 trillion, and public…
A: We can utilize the national income identity here. Y= C+ I +G C= Y - I - G I=S National Saving =…
Q: National Income Account (Millions of dollars) Government Purchases (G) 350 Taxes minus Transfer…
A: Given, GDP = $1,680 million Government purchase (G) = 350 million Taxes minus transfer payment = 420…
Q: What are the effect of taxes on saving and consumption of less income people in low income…
A: Taxes is the compulsory payment levied by the government on the citizens of the country. Government…
Q: Consider the following data (in billion $) for a country in a particular year: (assume this country…
A: It is common to include GDP as part of a government subsidy or lifestyle in a country. When…
Q: Consider a closed economy for which GDP is equal to 22,000, taxes are equal to 7,000, consumption is…
A: GDP measures the market value of goods and services produced within an economy in a given period of…
Q: The next three questions involve the following situation. Consider a closed economy in which C =…
A: Given C= $345 billion G= $350 billion Y=$1000 billion Tax T=$100 billion We have to find value of…
Q: Consider country A, which is a closed economy. Suppose that A’s private saving is 280 and investment…
A: As per the information given in question, in country A saving and investment identity is : private…
Q: CO ( (O Which sequence of events describes what is happening here? Real interest SN (%) a SN new…
A: Given information:-
Q: In country B, consumption is $10 million, exports are $4 million, government purchases are $3…
A: a)GDP Consumption+government expenditure+investment+net exports(exports-imports) =10+3+2+(4-5)…
Q: Consider country B. Its absorption is 2500, the tax is 400, the investment is 400, the national…
A: Government saving = Government revenue from taxation - Government spending Real income =…
Q: An increase in savings implies a decrease in consumption and therefore a decrease in GDP.True/False…
A: Increase in savings reduces the consumption of the consumer. Reduction in consumption means, the…
Q: Suppose real GDP is $6,182 billion, taxes collected by the government are $719 billion, government…
A: Given Real GDP (Y) = $6,182 billion Tax (T) = $719 billion Government Spending (G) = $820 billion…
Q: Suppose the GDP of Brazil equals 1000, consumption equals 600, the government spending is 150 while…
A: Here we calculate the value of national savings by using the given information and choose the…
Q: In a given economy, consumption is given by C -1000+(Y-T) = If the real GDP is 9,606 and taxes and…
A: National savings is the sum of private and public savings , or we can say that we calculate the…
Q: Economists in Funlandia, a closed economy, have collected the following information about the…
A: We have the following information- Closed economy Y = 10,000 C = 6,000 T = 1,500 G = 1,700 I =…
Q: Suppose that disposable income, consumption, and saving in some country are $800 billion, $700…
A: Economic measures use mathematical tools to determine the value of economic variables such that:…
Q: Suppose that taxes on households are 10, and the government deficit is 5. Pre-tax household income…
A: In an economy, total GDP includes the spending made by the different sectors when computing it using…
Q: Consider the following data for a closed economy: Y = $13 trillion C = $6 trillion |= $3 trillion TR…
A: In an economy, private saving is made by the households and public saving is made by the government.
Q: Suppose that in a closed economy GDP is equal to 11,000, taxes are equal to 1,000, consumption…
A: Given, GDP = 11,000 Tax = 1000 Consumption = 7500 Government purchase = 2000
Must solve B...asap
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Government budget and national saving: 1. Suppose that GDP equals $10 trillion, consumption equals $6.5 trillion, and the government spends $2 trillion and has a budget deficit of $300 billion. Please find public saving, taxes, private saving, national saving, and investment.The economy of a country is characterized by the following equations: Aggregate consumption function C=100+0.50 (Yd), where Yd is the disposable income. Total taxes T=100, aggregate investment I= 100 and government expenditures G=100. What can be said about the budget about this country? O The balanced budget multiplier is greater than 1. The budget of the country is balanced. We cannot say anything about the budget. The country has a budget surplus. The country runs a budget deficit.Suppose the GDP is $8 trillion, taxes are $1.5 trillion, private saving is $0.5 trillion, and public saving is $0.2 trillion. assuming this economy is closed, calculate consumption, government purchases national saving, and investment. b. imagine that government start with a balanced budget and then, because of an increase in taxes, start running a budget surplus. graphically analyze the effects of the budget surplus on interest rate, saving and investment if loanable funds means the flow of resources available from private saving
- Define saving and investment. Data for the simple economy of Newt show that in 2011, saving exceeded investment and the government is running a balanced budget.What is likely to happen ? What would happen if the government were running a deficit and saving were equal to investment ?Suppose the GDP of a country with a closed economy is $22 trillion, (net) taxes are $4.2 trillion, public saving is $0.8 trillion, and private saving is $1.3 trillion. What are the values of consumption, investment, national saving, and government spending? 1b Is the government of this country running a budget surplus or a deficit?3. The balanced budget multiplier For both political and macroeconomic reasons, governments are often reluctant to run budget deficits. Here, we examine whether policy changes in G and T that maintain a balanced budget are macro economically neutral. Put another way, we examine whether it is possible to affect output through changes in G and T so that the government budget remains balanced. Start from equation (3.8): Y=k, +i+G-c7] 1-G a. When G increases by one unit, Y increases by, b. When T increases by one unit, Y increases by Suppose that the economy starts with a balanced budget: G =T. Suppose that Gand T increase by one unit each. Using your answers to (a) and (b), the change in . Is balanced budget changes in G and Tmacroeconomically Y equals_ neutral? (yes or no)
- Problem Given the following information about the economy of a country. Consumption function C = 85 + 0.5 Ya Investment function Government spending I = 85 G = 60 Net Taces T = 40 + 0.25 Y (i) Solve for equilibrium income and consumption. (ii) How much does the government collect in net taxes when the economy is in equilibrium ? (iii) What is the government's budget deficit or surplus?In a closed economy, GDP is $1000, government purchases are $200, and consumption is $700. If the government has a budget surplus of $25, what are investment, taxes, private saving, and national saving? Explain with equations.3. a. Suppose that in a year when GDP is rising rapidly you also observe theGovernment budget balance increasing. How can you explain this correlation? b. Now suppose instead that in a year when GDP is rising rapidly you also observethe Government budget balance decreasing. How can you explain this correlation?
- G Spending and NTR Budget Deficit Budget Surplus Y1 V1 . I I Y2 V2 je I I Y3 I V3 G NTR Real GDP BL Real GDP In the following graph, NTR is net tax revenue, G is government spending on goods and services, BL is budget line. Which of the following is true? A balanced budget would occur at income level Y1 A balanced budget would occur at income level Y2 A balanced budget could occur at income levels Y1, Y2 or Y3 The existence of a balanced budget cannot be determined because no inflation on tex revenues is givenIf you were given the chance to create or amend the 2021 National Budget Plan, What executive department should receive the lion's share (biggest budget)? note: Please choose Department of Health because of COVID-19 pandemic. - What are the projects and programs that needed to be implement? Are these revenue expenditures or capital expenditures? - Is it for long term or by phase implementation? - Where are the locations of the projects? Urban areas or rural areas? - How long do you see the department getting the lion's share? Justify the forecast.A. Calculate the levels of consumption and savings that occurs when the economy is in equilibrium. B. Computer the government budget deficit in this economy. C. If government spending in banana land increases by $1000 what is the amount of the increase in equilibrium output? D. If taxes in banana land decrease by $1000 what is the new equilibrium output in this economy? E. To keep the government budget balanced, of both government spending and taxes in banana land increase by $1000 what is the change in equilibrium income level?