Soru
5. Consider an economy described as follows: Y=C+I+G Y=8,000 G=2,500 T=2,000 C=1000+2/3(Y-T) I=1,200-100r 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.
Çözüm
4.1
(235 Oylar)
Cemre
Profesyonel · 6 yıl öğretmeni
Uzman doğrulaması
Cevap
a) To compute private saving, we need to subtract consumption (C) from disposable income (Y-T). Disposable income is calculated as Y - T.Private saving = (Y - T) - CPrivate saving = (8000 - 2000) - (1000 + 2/3(8000 - 2000))Private saving = 6000 - (1000 + 2/3(6000))Private saving = 6000 - (1000 + 4000)Private saving = 6000 - 5000Private saving = 1000To compute public saving, we need to subtract government spending (G) from tax revenue (T).Public saving = T - GPublic saving = 2000 - 2500Public saving = -500National saving is the sum of private saving and public saving.National saving = Private saving + Public savingNational saving = 1000 - 500National saving = 500b) To find the equilibrium interest rate, we need to set the investment function (I) equal to national saving.I = National saving1200 - 100r = 500r = (1200 - 500) / 100r = 7c) Now suppose that G is reduced by 500. We need to recalculate private saving, public saving, and national saving.Private saving = (Y - T) - CPrivate saving = (8000 - 2000) - (1000 + 2/3(8000 - 2000))Private saving = 6000 - (1000 + 2/3(6000))Private saving = 6000 - (1000 + 4000)Private saving = 6000 - 5000Private saving = 1000Public saving = T - GPublic saving = 2000 - 2000Public saving = 0National saving = Private saving + Public savingNational saving = 1000 + 0National saving = 1000d) To find the new equilibrium interest rate, we need to set the investment function (I) equal to the new national saving.I = National saving1200 - 100r = 1000r = (1200 - 1000) / 100r = 2Therefore, the new equilibrium interest rate is 2.