Calculate taxes-investment-public savings

Assignment Help Macroeconomics

Reference no: EM133200914

Assignment:

Savings/Investment In Class

GDP = 10

Consumption = 7

Government Spending = 2

Private Savings = 1

Transfer Payments = 1

A) Calculate Taxes, Investment, Public Savings and National Savings

B) Draw the graph of the market for loanable funds, assuming the equilibrium interest rate i* = 3% Make sure to label the axis and equilibrium points

C) If G increases so that now G = 2.5, recalculate Public Savings, National Savings and Investment. (assume that any other variables stay the same)

D) Show the change on your graph. What happens to i* and Q*?

E) Use a production function to show the affects of the change from A to C and explain the impact on long run growth.

Reference no: EM133200914

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