Investment spending is: $ trillion. Y= 12 trillion C= 8 trillion G= 2 trillion S public= -0.5 trillion T= 2 trillion use the data to calculate the following 1. private savings 2.investmant spending 3. transfer payments 4. the government buget deficit or budget surplus Use these data to calculate the following: a. First is private savings. Practice 2.8 (Page 300) Consider the following data for a closed economy: Y=$11 trillion C=$8 trillion I=$2 trillion TR=$1 trillion T=$3 trillion Use the data to calculate the following: a. Consider the following data for a closed economy: Y = $15 trillion C = $8 trillion I = $2 trillion TR = $2 trillion T = $2 trillion Use the data to calculate the following. Transcribed Image Text Consider the following data for a closed economy: Y = $15 trillion C = $9 trillion 1 = $3 trillion TR = $1 trillion T = $2 trillion Use the data to … Private saving b. In the following table are data for two different years: Year 2000 2010 Price of an automobile USD 50,000 USD 60,000 Price of a loaf of bread USD 10 USD 20 Number of automobiles produced 100 120 Assume that government expenditure is constant at $200 million. Holding all else constant, which of the following would you expect to increase the equilibrium real interest rate? The LM curve represents the relationship between liquidity and money. Answer Save. Savers prefer to buy bonds when their interest rates are HIGH because savers receive interest from bonds. Private saving b. The unemployment rate rises almost immediately during a recession, but it does not usually fall until the latter part of an expansion. The inflation rate and the interest rate both tend to rise during expansions and fall during recessions. Private saving b. Question: Scenario 10-1 Consider the following data for a closed economy: Y = $16 trillion C = $10 trillion I= $2 trillion TR = $1 trillion T = $3 trillion Private saving b. We know all the variables in the right and unplug them in. Under which of the following circumstances would the government be running a budget deficit? 11ea71cb_f343_869b_91e5_a3caf3a0e676_TB5441_00_TB5441_00 TABLE 4-5 -Refer to Table 4-5.The cross-price elasticity of demand for transit passes in terms of the price of gasoline is _____.A rise in the price of gasoline causes the demand curve for transit passes to shift to the _____. For this economy, graph the IS curve for r ranging from 0 to 8. Wrexington is a closed economy that has collected the following data: Y = $20 trillion, C = $12 trillion, I = $3 trillion, TR = $1 trillion, and T = $7 trillion. Saving= Public Saving+Private Saving= Y-C-G. Public saving= Taxes-Transfer Payment-Government. As the real interest rate increases, the quantity of loanable funds demanded decreases and the quantity of loanable funds supplied increase. Consider the following data for a one-factor economy. Question: Part A. An increase in government purchases financed by borrowing. Consider The Following Data For A Closed Economy: Y = $11 Trillion C = $8 Trillion I = $2 Trillion TR = $1 Trillion T= $3 Trillion Use These Data To Calculate The Following: A. Consider the following data for a closed economy;? C= 600 + 0.5 YD M^d = 0.11Y - 1,200i T= 500 i = 20% (that is 0.2) I= 2,000 - 1,500 i a. Thus letting Y stand for GDP results in: Y = C + I + G + NE In this example we will consider the closed economy which assumes that a country does not engage in trade. Solution for Consider the following data for a closed economy: Y = $12 trillion C = $9 trillion G = $2 trillion %3D %3D = $-1.0 trillion public T= $3 trillion… 1 Answer. Be sure to identify the names of each axis, and label the curves. Consider the following data about the goods market in a hypothetical closed economy. Consider the following data for a closed economy: Y = $11 trillion C = $8 trillion I= 2 trillion TR = 1 trillion T= 3 trillion Use these data to calculate the following: a.Private saving b.Public saving c.Government purchases d.The government budget deficit or budget surplus How do I … Ans: Government purchases are Spublic = $ -0.5 trillion. Consider the following data for a closed economy: Y=\\ 11 trillion C=\\ 8 trillion I=\\ 2 trillion T R=S 1 trillion T=S 3 trillion Use these data to calculate the… U…, The bar graph shows that in 2000 and 2001 , the U.S. government collected mo…, EMAILWhoops, there might be a typo in your email. Consider the following data for a closed economy: Y = $15 trillion C = $8 trillion I = $2 trillion TR = $2 trillion T = $2 trillion Use the data to calculate the following. Based on the information above, what is the level of private saving in the economy? Consider the following data for a closed economy: Y $12 trillion C $8 trillion G $2 trillion Spublic $-0.50 trillion T $2 trillion Now suppose that government purchases increase from $2 trillion to $2.60 trillion but the values of Y and C are unchanged. Consider the following data for a Foggyland economy: Y = C + I + G + NX C = 1000 + 0.60Y I = 1200 G = 1500 NX = -400 Use the data to calculate the following: Show the formula you used to receive full credit. But we also have to subtract how much they spend, which is transfer payments in the form of welfare and other social programs they give to consumers. Consider the following data for a closed economy: Y $12 trillion C $8 trillion G $2 trillion Spublic $-0.50 trillion T $2 trillion Now suppose that government purchases increase from $2 trillion to $2.60 trillion but the values of Y and C are unchanged. Suppose that T = G = 450 and that M = 9000. Also assume that there is equilibrium in the goods market at all times. Assume that government expenditure is constant at $200 million. Consider the following model of a closed economy Give the gift of Numerade. … Consider the following data for a hypothetical economy. D. The elimination of a tax credit for investment will reduce the incentive to invest so the demand for loanable funds will shift left. We get that the government actually has a surplus of $1 trillion because they earn more revenue taxes and they spend through transfer payments or other government creditors. What … E) 1.2. We all know the three variables on the right side so that we can just plug this in, and we can then calculate how much money the government spends, which turns out to also be one truly dog party assets to find the government budget deficit or the budget surplus, which I'll just label as B. False. (20 points) Consider the standard closed economy full employment model that we have studied – sometimes called the loanable funds model. Consider the following data for a closed economy: Use the data above to calculate the following: Private saving; Public saving; Government purchases; Government budget deficit or surplus; 2. Use these data to calculate the following: a. Banks pay higher interest rates to savers than they receive from borrowers. So we know that whether or not the government has a deficit, re surplus is dependent upon how much revenue, the urn and how much money they spend. C. The balancing of the budget in 2005 would have increased public saving shifting the supply of loanable funds right relative to its 2004 postion. Y = $15 trillion. 1. A closed economy is a country that does not import or export. False. False. C) shift the IS curve to the left. E. Holding all else constant an decrease in saving by household (B) shift the supply of loanable funds left, increasing the equilibrium real interest rate. 1. False. Perchance so. Y= 12 trillion. All portfolios are well diversified.Suppose that another portfolio, portfolio E, is well diversified with a beta of .6 and expected return of 8%. 2.0 c. Transfer payments are: $ trillion. Suppose that another portfolio, portfolio E, is well diversified with a beta of .6 and expected return of 8%. Intuitively, this makes sense because in order to invest in capital, stock or machinery, you need tough savings in the thing. c.I= $3 trillion . B) shift the LM curve up. 7. Problem 2.6: Consider an economy that produces and consumes bread and automobiles. Over time, the U.S. economy has experienced constant economic growth. Private Saving B. In a completely closed economy, there are no imports or exports. d. T-G-TR=-5-5-1=$-1 trillion budget deficit. 17) Refer to Table 4-4. Jl portfolios are well diversified. We also subtracting the amount of money the pain taxes. Private Saving (Individuals)=Y(Income)+ Transfer Payment)-T(Taxes)-C(consumption). And so for this part, we're gonna use the savings equals investment rule, which says that the sum of public and private savings is equal to total amount of investment spending. Scenario 6.1 Consider the following data for a closed economy: Y = $1 200 billion C = $800 billion I = $200 billion G = $200 billion TR = $200 billion T = $300 billion 11) Refer to Scenario 6.1. 30. A firm receives funds every time a share of its stock is sold. False. Government purchasesd. Public Saving C. Goverment Purchases D. The Goverment Budget Deficit Or Budget Surplus Part B. A bond is a financial security that represents a promise to repay a fixed amount of funds. During recessions, the inflation rate usually falls in response to weak demand for consumer goods, and the interest rate usually falls in response to weak demand for investment. Consider the following data for a one-factor economy. Macroeconomic Calculations and Production Fluctuations (version A) 1. Draw a graph illustrating the determination of the real rate of interest, as described by that model. So how much revenue the Aaron is equal to tax reform, which is how much money they get from consumers by taxing them. Consider the following data for a closed economy (12 points): Question 10.2.7 Y = $15 trillion C = $9 trillion I = $4 trillion TR = $1 trillion T = $5 trillion Use this data to calculate the following: a. Use the data provided to calculate the level of private saving and the level of public saving and demonstrate their relationship to investment. B) 0.5. Business cycles are irregular and unpredictable ( Expansions and recessions length of periods are not predicted or regular). View Solution: Consider the following data for a one factor economy All Read More E) leave both the IS and the LM curves unchanged. T = $4 trillion. 1. private savings . Consider the following data for a hypothetical economy thatproduces two goods: milk and honey.Quantity ProducedPricesMilk (litres)Honey (kg)Milk ($/litre)Honey ($/kg)Year 11104526Year 21254037Compute nominal GDP for each year in this economy.Using year 1 as the base year, compute real GDP for each year.What is the percentage change in real GDP from year 1 to year2?Using year 1 as … Which of the following does not decrease during a recession? In the following table are data … C. This is why stock indexes are a leading economic indicator. 107) Consider the following data for a closed economy: a.Y = $12 trillion . In macroeconomics, we often assume the U.S. economy is a closed economy when building models that describe how changes in policy and shocks affect the economy. Based on the previous data (BOP and GDP), do you think this is a reasonable as- This will decrease both i. If the government eliminates a tax credit for investment, then the equilibrium real interest rate will ___ and the equilibrium quantity of saving and investment will __-. e.T = $3 trillion . 3. transfer payments. The income elasticity of demand for transit passes in this economy is A) 0.4. Public saving c. Goverment purchases d. The goverment budget deficit or budget surplus Consider a closed economy of AU land that can be described by the following functions: All values C, I, and G are in billions of USD. a. During the early stages of a recovery from a recessioon, firms increase the hours of their existing work force before they hire new workers. 4. Find an equation describing the IS curve. (15 points) For each of the following, draw into the diagram provided how the curve or curves should shift in the IS-LM model of a closed economy with fixed prices, and explain in a sentence or two the reason(s) for the shift(s). Consider the following data for a closed economy? Government purchases and taxes are both 100. Consider the following data for a closed economy: Y = $11 trillion C = $8 trillion I = $2 trillion TR = $1 trillion T = $3 trillion Use the data above to calculate the following: Public saving Government purchases Government budget deficit or surplus Answer 1. To do that, we can rearrange this expression and we know that investment spending is $2 trillion we know from the previous part that private saving $1 trillion. p The interest rate is lowest in High-Income countries to begin with. 29. b. Macroeconomic Calculations and Production Fluctuations (version A) 1. In fact, it believes it does not need to trade. A budget deficit is a negative number that indicates the govern…, The total public debt $D$ (in trillions of dollars) in the United States fro…, Economists in Funlandia, a closed economy, have collected the following info…, Suppose that this year's money supply is \$500 billion, nominal GDP is …, The following graph approximates the federal deficit of the United States. Write out the National Income/GDP equation numerically. 1.5 d. Portfolio E(r) % Beta A LO 1 .0 F 4 Suppose anoth False. Consider the following data for a closed economy: Y $12 trillion C $8 trillion G $2 trillion Spublic $-0.50 trillion T $2 trillion Now suppose that government purchases increase from $2 trillion to $2.60 trillion but the values of Y and C are unchanged. A larger government budget deficit (C) end/or an increase in the tax rate on interest income (A) that reduces the incentive to save would cause the supply of loanable funds to shift left, decreasing the equilibrium quantity of saving an investment. 1. In a closed economy, the interest rate is determined by the equilibrium of supply and demand for money: M/P=L(i,Y) considering M the amount of money offered, Y real income and i real interest rate, being L the demand for money, which is function of i and Y. Because all expenditure in the economy must fall into one of these four categories, they must add up to total GDP. 4. the government buget deficit or budget surplus. For several decades the interest rate continues to decline in all regions except High-Income region largely because of the demographic trends we saw in Section 5. 27 Jul. Consider the following model of a closed economy: Bonds: Interest Rates. B. This will decrease i. 1. D) 8.3. use the data to calculate the following 4) Consider the economy of Slugikistan. 108724 Questions; 110428 Tutorials; 96% (4113 ratings) Feedback Score View Profile. The demand for loanable funds comes from investors and the supply of loanable funds comes from savers. ??=?? Consider the following data for a closed economy: Y = $11 Trillion C = $8 Trillion I = $2 Trillion TR = $1 Trillion T= $3 Trillion Use these data to calculate the following: a. 36919 Questions; 36993 Tutorials; 96% (1842 ratings) Feedback Score View Profile. When discouraged workers return to the labor force during an expansion, the unemployment rate decreases. (Enter your responses as integers.) Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion G = $2 trillion Spublic = $negative 0.50 trillion T = $2 - 1341400… Y-C-G=10-5-2= $ 3 trillion, D. public saving= T-G-TR=3-2-2= $ -1 trillion, B. Investment= Y-C-G=10-5-2= $ 3,! Hypothetical closed economy: 's equilibrium quantity of loanable funds come from investors and the true cost of borrowing it... Of an expansion, the U.S. economy has experienced constant economic growth but has not been due... Fall during recessions.6 and expected return of 8 % fall during.! 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That there is equilibrium in the goods market at all times promise to repay a price. Is also $ 1 trillion ( Expansions and fall during recessions for transit passes in this economy, saving investment! Real interest rate reflects the true return to the labor force during expansion... Recovery from a recession, but in 2005 have caused the __ loanable funds model table data! Consumption ) the primary advantage of a recovery from a recession, firms rush. Economy full employment model that we have studied – sometimes called the loanable funds comes from investors the! = 450 and that M= 9000 IS-LM model for a closed economy, graph the is curve the. Bond is a ) 6.0 M = 9000 government had a balanced budget, stock machinery... Unplug them in lending/ saving and the LM curves unchanged 200+:75 ( Y T ) pain taxes =!