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Explain the difference between saving and investment as

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1. Explain the difference between saving and investment as defined by a macro economist. Which of the following situations represent investment? Saving? Explain.

a. Your family takes out a mortgage and buys a new house.

b. You use your $200 paycheck to buy stock in AT&T.

c. Your roommate earns $100 and deposits it in her account at a bank.

d. You borrow $1,000 fr om a bank to buy a car to use in your pizza delivery business.

2. Suppose GDP is $8 trillion, taxes are $1.5 trillion, private saving is $0.5 trillion, and public saving is $0.2 trillion. Assuming this economy is closed, calculate consumption, government purchases, national saving, and investment.

Reference no: EM13319261

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