Solution-What are the new equilibrium values for c

What are the new equilibrium values for c

Assignment Help Business Economics

Reference no: EM132640133

Assume that GDP (YCCYTrIIrrTG) is 6,000. Consumption () is given by the equation = 600 + 0.6( - ) - 100. Investment () is given by the equation = 2,000 - 100, where is the real rate of interest in percent. Taxes () are 500 and government spending () is also 500.

National Saving (S) = Y- C - G

S= Y - [ 600 + 0.6 (Y-T) ] - 500

S= Y- 600 - .06 (Y - 500) - 500

S= Y- 1100 - .06 (Y- 500) - 300

National Savings (S) = .4Y - 800

Current Equilibrium for R= 4

Current Equilibrium for C = 3900

Current Equilibrium for I = 1600

Question 1. If Government spending rises to 1,000 what are the new equilibrium values for C, I, and R?

Question 2. Illustrate what happens to S, I, and r using the loanable funds framework.

Reference no: EM132640133

Questions Cloud

Calculate the opportunity cost of producing : Calculate the opportunity cost of producing an additional pound of ham in Portugal and Spain, as well as the opportunity cost

Determine how the findings can be applied : Determine how the findings can be applied in the research being conducting. For this assignment, students will select a business topic of their choice

Find increase in the minimum wage : Which of the following is a most likely result of an increase in the minimum wage?

How the budgeting process can assist the ent specialists : How the budgeting process can assist the ENT specialists to articulate decisions about the use of resources and how the budget can be used throughout the year

What are the new equilibrium values for c : If Government spending rises to 1,000 what are the new equilibrium values for C, I, and R?

Reflective reading journal : Reflective Reading Journal - is comprised of selected quotes from assigned readings, and corresponding

Solve beginning finished goods inventory : Solve beginning finished goods inventory when we are given full absorbtion costing of opening finished good inventory and variable manufacturing cost

How many cut mat sets were started in the coating department : How many cut mat sets were started in the Coating Department during May. May activity in Accessory World's Coating Department

Corporate downsizing and lack of job security : If corporate downsizing and lack of job security cause consumers to spend less and save more, what will be the impact on the exchange rate and trade balance?

User Account

All Pages

What are the new equilibrium values for c

Reference no: EM132640133

Reference no: EM132640133

Questions Cloud

Reviews

Write a Review

Business Economics Questions & Answers

Negative attitude about the products country of origin

A company can adopt a no pro-union shirt rule

European retailers utilize a wide variety of government

Give a clear description of the being scale used

Show graphically slutsky and hicks decomposition

Illustrate what was your total revenue in dollars yesterday

What will france per capita real gdp be in 2045

Illustrate what are economic effects of the price ceiling

Was the demand for her books price elastic or price

What is fallacious about the two arguments

How much is invested at each rate

Essay on GDP and Economic growth in Australia

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT