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Q. Assume the following information about an economy (in million of dollars):
GDP = $1000
C = $800
G = $120 I = $100
X - IM = - $20 T = $80
TR = $10
Where C is private consumption spending, G is public spending, I is investment spending, T represents taxes and TR represents transfers from government to households. Finally, X - IM represents net exports.
a. Given the above information, compute the level of private savings (Sp), public savings (Sg) and net capital inflows (KI). Is the sum of private savings, public savings and net capital inflows equal to the level of investment? What is the value of national savings (SN)?
b. Now, let's change the problem. First, assume that a net capital inflow is 0. Now, suppose that Consumption (C) is given by the following equation instead of being a provided value: C= 380 - 800i.
suppose the market for hdtvs in the usa can be expressed by the following demand and supply equationsqd 7500 - 2400pqs
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