ENGR.ECONOMIC ANALYSIS
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ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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5.
The table below shows aggregate values for a hypothetical economy. Suppose this economy has real GDP equal to potential output.
TABLE 25-3
Refer to Table 25-3. What is the level of private saving for this economy?
| Potential GDP | $14 000 |
| Government purchases | $2100 |
| Investment | $300 |
| Consumption | $10 000 |
| Net tax revenues | $2000 |
Refer to Table 25-3. What is the level of private saving for this economy?
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$2000
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$500
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$50
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$3000
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$100
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- Ñ6arrow_forward3. The meaning of saving and investment Classify each of the following based on the macroeconomic definitions of saving and investment. Saving Investment Caroline purchases new ovens for her cupcake-baking business. Antonio buys a government bond. Dmitri takes out a loan and uses it to build a new cabin in Montana. Frances purchases stock in Pherk, a pharmaceutical company.arrow_forward7. Problems and Applications Q8 Suppose the government borrows $20 billion more next year than this year. The following graph shows the market for loanable funds before the additional borrowing for next year. Use the orange line (square point) to graph the new supply of loanable funds as a result of this government policy to borrow $20 billion more next year than this year. Interest Rate (Percent) 10 9 8 7 6 01 3 2 1 0 0 Demand 10 20 30 40 50 60 70 Loanable Funds (Billions of dollars) 80 Supply 90 100 New Supply ?arrow_forward
- 22 hw d-farrow_forward10. Work It Out. Consider an economy described as follows: Y = = Y G T 1 1 Cam C = I C+I+G 8,000 2,500 2,000 1000+2/3 (Y - T) 1,200 100 r. a. In this economy, compute private saving, public saving, and national saving. b. Find the equilibrium interest rate. c. Now suppose that G is reduced by 500. Compute private saving, public saving, and national saving. d. Find the new equilibrium interest rate.arrow_forwardThe following table contains data on the relationship between saving and income. a. Rearrange the income and saving data into an ascending order of income and graph them on the accompanying grid. Income per Year $ Saving per Year 15,000 $ 0 10,000 5,000 20,000 1,000 -500 500 0 1,500 Rearranged Rearranged Income per Year Saving per Yeararrow_forward
- All other things equal, an increase in government borrowing will ________ a. shift the demand curve for loanable funds to the right, increasing interest rates. b. shift the supply curve of loanable funds to the right, decreasing interest rates. c. shift the demand curve for loanable funds to the left, decreasing interest rates. d. shift the supply curve of loanable funds to the left, but interest rates remain unchanged.arrow_forwardpls also do the grapharrow_forwardInterest Rate% 12% 10% 8% 6% 4% 2% 0 5 10 15 20 25 30 35 40 45 50 Supply of Savings Select one: a. The economic dips into a recession and firms see profits fall b. Firms become more optimistic about their expected profits c. An increase in business taxes d. A decrease in household wealth Quantity of loanable funds (billions) Refer to the graph above. Which of the following would cause interest rates to increase? Ti Demand for Borrowingarrow_forward
- 4. Suppose gross saving in the United States is 20 percent of Gross National Product (GNP). a. If business saving is 15 percent of GNP and government saving is 4 percent of GNP, what percent of GNP is personal saving?b. Explain why a federal budget surplus increases national saving while a budget deficit decreases national saving.c. How can a federal budget deficit increase market equilibrium interest rates and reduce private investment and future economic growth?arrow_forwardHi I need the answer to this question thank you!arrow_forward8) 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; decreasearrow_forward
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