Public saving is positive when: a. there is a government budget deficit b. after-tax income of households and businesses is greater than consumption expenditures c.there is a government budget surplus d. the government's budget is balanced

Public saving is positive when: a. there is a government budget deficit b. after-tax income of households and businesses is greater than consumption expenditures c.there is a government budget surplus d. the government's budget is balanced

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Savings,investment And The Financial System

Section: Chapter Questions

Problem 6QR

See similar textbooks

Related questions

Q: Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly…

A: Monetary policy consists of a set of tools that the central bank use to control market fluctuations.…

Q: Question: Consider the following graph that shows the equilibrium of an economy maintaining a FIXED…

A: A country exercising fixed exchange rate regime keeps the exchange rate for domestic currency…

Q: Hobby hunter Jack decides what to do the next weekend. He can either stay at home and watch movies…

A: A representation of a game that captures the sequential nature of a game and includes all possible…

Q: A lottery prize is advertised as being $4,000,000 ($4 million). The winner receives $1 million…

A: Present value refers to the current worth of a future sum of money or cash flow, discounted at an…

Q: The following is a total cost curve. Total cost ($) 1000- 900- 800- 700+ 600- 500- 400- 300- 200+…

A: Total cost refers to the sum of all costs incurred in producing a particular quantity of output or…

Q: Provide a graphical analysis of the effect of a temporary but persistent increase in total factor…

A: The Real Business Cycle (RBC) model is a macroeconomic framework that analyzes the fluctuations in…

Q: Solve with complete solution and draw the cash flow diagram A company is considering constructing a…

A: Since you have posted multiple questions, we will answer the first two questions for you. If you…

Q: 1.) Use the rectangle drawing tool to shade in the revenue received by kumquat producers before the…

A: An individual’s willingness to pay for each unit of the quantity he or she wishes to consume is…

Q: nomy of Turista produces only two products, protein bars and snowboards. In 2019 it produced 21…

A: Nominal GDP = Price of goods in current year * Quantity of goods in current year Real GDP = Price of…

Q: What is real GDP per capita if a country's real GDP is $5,968 billion and that country's population…

A: Real GDP per capita, also known as per capita income or income per person, is a macroeconomic…

Q: s it fair to deem some activities virtuous and others not in an imperfect market? Please provide the…

A: In terms of economics, a market that deviates from the idealized model of perfect competition is…

Q: How does the graph look for the effect of a temporary but persistent increase in total factor…

A: The concept of total factor productivity refers to how successfully and efficiently inputs are…

Q: Question 2 1 Which of the following is a positive statement? A recession leads to higher enrollments…

A: In economics, a positive statement refers to an objective statement that describes facts or makes…

Q: The following graph plots equilibrium in the money market at an interest rate of 1.5% and a quantity…

A: John Maynard Keynes devised the AD-AS model to explain changes in the economy's production and price…

Q: Under what circumstances might an increase in worldwide interest rates r* be beneficial for a small…

A: An interest rate refers to the percentage of the principal amount that a lender charges as the cost…

Q: Suppose we instead tax the consumer rather than the driver. What happens in new equilibrium compared…

A: Shifting of tax refers to the transfer of the economic burden or incidence of a tax from the entity…

Q: 6. A maximizing worker with u(r, c) = ¹/2+c¹/2 earns a wage of 0.50 per hour. Non-labour income is…

A: The indifference curve depicts the combinations of composite consumption and leisure that provide…

Q: So is my solution wrong?

A: There are silly mistakes in your solution but overall algorithm is right. However, there is a slight…

Q: Real GDP per person is equal to: a. average labour productivity multiplied by the share of the…

A: Gross domestic product (GDP) is GDP given in basically the regular costs and refers back to the…

Q: Write short notes explaining the meaning and significance of the following concepts in economic…

A: Economic theory refers to a set of principles, concepts, and models that economists use to study and…

Q: Using the concept in Keynesian economics, which one of the following may not be an effective fiscal…

A: Fiscal policy refers to changes in taxes and government purchases to affect the aggregate demand…

Q: Consider Bowles’ theory about the firm’s employment of labour for pursuing profit maximization.…

A: where, Q = output per hour, e = the amount of output per unit of work done, d = the amount of work…

Q: When was the Solow growth model developed and what was significant about that period? What did it…

A: In the below steps, we will be explaining the solow growth model and endogenous growth model.

Q: a) Provide a graphical analysis of the effect of a temporary but persistent increase in total factor…

A: The RBC model is an economic structure for studying economic variations in closed economies that are…

Q: Fiat currencies only have value based upon exchange, whereas commodity money also has value. A.…

A: Money refers to a medium of exchange that is widely accepted in transactions for goods, services,…

Q: Year Real GDP Nominal GDP 2019 $15,283.65 $16,260.44 2020 $17,573.60 $18,433.70 2021 $19,810.67…

A: GDP is the gross domestic product. GDP is the market value of all final goods and services produced…

Q: 1. Advantages and 2. Disadvantages of Inflation

A: Numerous economists have made contributions towards the evolution of economic ideas and…

Q: The convergence hypothesis states that: a. technology levels between countries eventually converge…

A: The convergence hypothesis is a major concept of development theory. It states that given an equal…

Q: Assume that a country's economy is in a short-run equilibrium and the actual unemployment rate is…

A: Monetary policy consists of a set of tools that the central bank use to control market fluctuations.…

Q: According to Keynesian economics, which of the following is effective fiscal policy when there is a…

A: ***Since the options have not been provided, hence, the expert is required to solve the question in…

Q: Given the below information, figure out the ending consumption of both good x and good y and whether…

A: A utility function mathematically represents an individual's preferences or satisfaction. It is used…

Q: You are deciding whether to buy a bond. The bond will pay out $1,000 in 5 years. But there is…

A: The expected value of an investment is the average of the possible values, weighted by their…

Q: Which area(s) represent(s) PRODUCER SURPLUS at both P1* (associated with S1) and P2" (associated…

A: Producer surplus: Producer surplus is the benefits that the sellers received by selling products in…

Q: Use a graph to illustrate the relevant category of price elasticity of demand.

A: Price Elasticity of Demand (PED): This measures how much the quantity demanded of a good responds to…

Q: sider the accompanying graph, which depicts the cost ves of a perfectly competitive seller of…

A: DISCLAIMER “Since you have asked multiple question, we will solve the first three question for you.…

Q: Please no written by hand solution Question 1: Based on Porter’s Diamond theory of national…

A: ***Since the student has posted multiple unrelated questions, hence, the expert is requited to solve…

Q: 1) https://www.econlowdown.org/resource-gallery/monetary_policy_tools 2)…

A: Monetary policy alludes to the moves and choices made by a central bank or monetary position to…

Q: South Africa GDP was recorded at $302.5 billions and $311.7 billions in 2008, 2009 and 2010…

A: To decide the sort of unemployment within the given monetary condition, it's vital to don't forget…

Q: Total factor productivity refers to: a. total production in the economy b. all factors of…

A: Productivity refers to the measure of efficiency and output achieved in a production process…

Q: Give typing answer with explanation and conclusion For the following assume that the world has only…

A: Budget constraint: given the price of 2 goods and consumer’s income. The budget constraint shows…

Q: What best characterizes the relationship between wage labor and capital? a) Capital produces wage…

A: In capitalist economies, wage exertions refers to the association where individuals sell their labor…

Q: Discuss the development International Monetary Fund and its role in the international financial…

A: International organizations give significant benefits to economic well-being by fostering global…

Q: ive typing answer with explanation and conclusion to all parts Post answers with an explanation of…

A: Gross Domestic Product (GDP) is a commonly used measure to gauge the economic activity and size of…

Q: A. California has 11.1 million employed people, 6.2 million unemployed people and 7 million people…

A: Unemployment refers to a situation where individuals who are willing and able to work are unable to…

Q: What is protection and free trade

A: Protection and free trade are two contrasting strategies to international change and financial…

Q: Assume our complete 4-panel model of the economy in equilibrium at Y-full employment. If the Fed…

A: Full employment- It is an economic situation where all available labor resources are put to their…

Q: Using the model that we have developed, show what would happen with a new equilibrium domestic price…

A: Policy Rate: Policy rate refers to the interest rate set by the Central bank as part of its monetary…

Q: You deposit $1,000 in a bank account that pays a fixed interest rate of 5% per year and it compounds…

A: Given Present value P=$1000 Rate of interest =5% per year compounded annually We need to find the…

Q: 3. Light rail transit line is operating between San Diego and Chula Vista on the Mexican border.…

A: The average cost per passenger is the total cost divided by the number of passengers, giving an…

Q: O Attainable and Efficient O Utility Maximizing O Attainable but Inefficient O Unattainable of…

A: The production possibility curve depicts the separate combinations of goods that can be produced in…

Concept explainers

Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.

Question

Public saving is positive when:

a. there is a government budget deficit

b. after-tax income of households and businesses is greater than consumption expenditures

c.there is a government budget surplus

d. the government's budget is balanced

Definition Definition Income earned by a government that is not spent on current expenses, but rather saved for future investments or to pay off debts. It is the difference between government revenue and expenditures, and can be positive or negative.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Correct option

VIEW

Step 3: Incorrect options

VIEW

Solution

VIEW

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

When governments run budget deficits, how do they make up the differences between tax revenue and spending?
In a closed economy, the gross domestic product is $45,000, consumption is $17,300 and taxes are $8,200. If the national saving is 9,000, then this government will be running: Select one: a. A budget surplus of $10,500 b. None of the answers are correct c. A budget deficit of $10,500 d. A budget surplus of $18,700 e. A budget deficit of $18,700
• Analyze the effects of a government budget deficit. • Examine how the interest rate is determined in a variety of scenarios. • Synthesize knowledge of saving, investment, and the financial system. 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.
DONOT ANSWER QUESTION 1 ONLY 2, • Analyze the effects of a government budget deficit. • Examine how the interest rate is determined in a variety of scenarios. • Synthesize knowledge of saving, investment, and the financial system. 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, an investment. The model of loanable funds: 2. Please use the loanable funds model to analyze the effects of a government budget deficit (you can attach a copy of your graph showing your work): A. Draw the diagram showing the initial equilibrium. B. Determine which curve shifts when the government runs a budget deficit. C. Draw the new curve on your diagram. D. What happens to the equilibrium values of the interest rate and investment?
8) government budget surplus from reduced government spending will ________ thelevel of investment in the economy and ________ the level of public saving in theeconomy.A) increase; decreaseB) increase; increase C) decrease; increaseD) decrease; decrease
Consider an economy in which GDP is $30 billion. Tax revenue is $7 billion, consumption is $15 billion, and the government has a budget surplus of $2 billion. Show your work in each of the following questions. (a) What is the level of government spending?(b) What is private saving?
What are the major functions of a government budget? Discuss “revenue” and “development” budgets mentioning the sources of finance of these two. Give a critical analysis of our budget of financial year 2020-21.
15. The change in the Personal current taxes from 4th quarter of 2017 to the 4th quarter of 2019 is: ______ billions. 16. he change in the Net federal government saving (budget deficit), from 4th quarter of 2017 to the 4th quarter of 2019 is: ______ billions.
When a government runs a deficit, it _________ a. It cuts fundings for defense and uses the money to other government services. b. It shuts the government down. c. It borrows from the public through the financial system to increase its spending. d. It reallocates money from departments that have excesses to departments that have deficits.
4. What have been the various approaches advocated to reform budgeting processes at the state and local levels? 5. What are the five key areas of future state and local budget needs? Which one do you think is the most critical and why? Explain.
5. Suppose damages caused by a typhoon reduced output by P600 million. In response, the government plans to increase expenditure. Assume that the marginal propensity to consume is stable at 80%. a. In order to reach the pre-typhoon level of output, by how much should government expenditure increase?
In an economy, the total borrowings are $31,000 and capital expenditure is $7000 Find the value of Fiscal deficit