Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Economics in Funlandia, a closed economy, have collected the following info about the economy for a particular year: NX = 0 Y = 10,000 C = 6,000 T = 1,500 G = 1,700
Economics in Funlandia, a closed economy, have collected the following info about the economy for a particular year: NX = 0 Y = 10,000 C = 6,000 T = 1,500 G = 1,700. The economists also estimate that the investment function is: I = 3,300 - 100r; Where r is the country's real interest rate, expressed as a percentage.
Calculate private saving, private saving, national saving, investment, and the equilibrium real interest, budget balance.
Expert Solution
Given,
Income (Y) = 10,000
Consumption (C)= 6000
Tax (T)= 1500
Government spending (G)= 1700
Investment function (I) = 3,300- 100r
Private saving= Y- T- C
= 10000- 1500- 6000
= 2500
Public saving= T- G
= 1500- 1700
= -200
National saving= Y- G- C
= 10000- 1700- 6000
= 2300
Investment= National saving= 2300
Equilibrium rate of interest;
Investment function (I) = 3,300- 100r
2300= 3300- 100r
100r= 3300- 2300
100r= 1000
r= 1000/ 100
r= .10 or 10%
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
