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If Y = C+I, saving, S, is defined as S=Y-C and C=cY, what is the ratio of saving to income, S/Y
a. 1+c
b. 1-c
c. c
d. 1/(1-c)
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- Assume an economy with 1000 consumers. Each consumer has income in the current period of 50 units and future income of 60 units and pays a lump-sum tax of 10 in the current period and 20 in the future period. The market real interest rate is 8%. Of the 1000 consumers, 500 consume 60 units in the future, while 500 consume 20 units in the future. a. Determine each consumer's current consumption and current saving. For the group of consumers that consume 60 units in the future, current consumption is 21.48, and current saving is 18.52. For the group of consumers that consume 20 units in the future, current consumption is 58.52, and current saving is -18.52 (Round to two decimal places as needed.) b. Determine aggregate private saving, aggregate consumption in each period, government spending in the current and future periods, the current-period government deficit, and the quantity of debt issued by the government in the current period. Aggregate consumption in the current period is…Refer to the following figure. The equation for this household's saving function is Saving -300 1,000 saving IncomeSuppose you purchase a new house for $200 000, making a down payment of 5% and takingout a mortgage on the balance. What is the return on your investment in your house if one yearlater the price of your house increased by 10%? (show your work).A) 100%B) 150%C) 200%D) 220%
- I. EOQ Model Suppose during your college life, every year you need $5,000 cash to spend in addition to the studying expenses. Each time in need of cash, you decide to go to the bank for that. And the transportation costsyou $5 (assumed amount) of going to the bank and coming back. Assume that the current saving/checking link account has an interest rate of 5%. Please find the optimal solution of the amount of cash each time for the withdraw.help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all workingThis person earns $1000 of income today and $2000 income next year. Point C represents his consumption if he doesn't borrow or lend. Consumption Next Year The interest rate is 10%. Consumption Today Moving from C to A the person is saving money and earning interest. O Moving from A to C, the person is borrowing and paying interest. O Moving from C to B, the person is saving and earning interest. O Moving from C to B, the person is borrowing and paying interest.
- Using the figure below, graphically prove that the consumer saves less when his future income increases.Define the term short-term investments?It has been said that a society withhigh savings rate is a society with ahigh standard of living. Discuss thelink (if any) between saving andstandard of living and also explainthe overall economic function ofprofits.
- If APC is 0.63 and consumption is $1000 Calculate incomeA firm will invest in capital if... the present value of the capital is greater than the market rate of interest. the internal rate of return is less than the market rate of interest. the internal rate of return is greater than the market rate of interest. the present value of the capital is less than the market rate of interest.An individual lives for 5 years - 4 years of work followed by 1 year of retirement. He earns $25,000 during each year of work but $0 during retirement. The interest rate is 5% Assume that the individual wants his consumption to be the same in each of the 5 years. a. What utility function would justify this choice of consumption pattern? b. Write out the intertemporal budget constraint in present value form.c. What level of consumption does he choose?d. What is the value of his assets at the beginning of retirement?