Will the saving rate rise over time or fall

Assignment Help Econometrics

Reference no: EM13186224

The economy of Sonrisa has 1000 people in three income categories: poor, middle class, and rich. The poor ear $500 per year and have to spend it all to meet their consumption needs. The middle class earn $2,000 per year, of which $1,500 is spent and the rest saved. The rich earn $10,000 per year, and consume 80% of it, saving the rest.

(a) Calculate the overall saving rate in Sonrisa if 20% of the people are poor and 50% are in the middle class.

(b) Suppose that all growth occurs by moving people from the poor category to the middle-class category (all poor people become middle-class people). Will the saving rate rise over time or fall?

Reference no: EM13186224

Questions Cloud

What percent of the required credits does she have : Sharon needs 64 credits to graduate fro her community college. So far she has earned 24 credits. What percent of the required credits does she have?

Find the actual speed and direction of the plane : An airplane is flying on a bearing of 265 degrees at 420 kmph. A wind is blowing with a bearing of 170 degrees at 20 mph. Find the actual speed and direction of the plane.

Classical conditioning-identifying the UCS-UCR-CS : Explain this situation in terms of classical conditioning, identifying the UCS, UCR, CS, and CR.

Determine the probability that no cars arrive ever : suppose that cars arrive at a traffic light according to a Poisson process with a rate of one car per minute starting from t=0 minutes.

Will the saving rate rise over time or fall : The economy of Sonrisa has 1000 people in three income categories: poor, middle class, and rich. The poor ear $500 per year and have to spend it all to meet their consumption needs. The middle class earn $2,000 per year, of which $1,500 is spent a..

Compare the sigmund freud-erik erikson-karen horney : Compare and contrast any two of these: Sigmund Freud, Erik Erikson, Karen Horney, B. F. Skinner, John Watson, Jean Piaget, and Albert Bandura. Evidence wise, who(m) do you agree with most? Why?

Determine the expected number of times the person returns : A person repeatedly and independently flips a coin to decide whether to take a step to the left or to the right from a point X. determine the expected number of times the person returns to X.

Describe what is the molarity of the chloride ion : lead nitrate is needed to precipitate all of the chloride ion in a 10.00-mL sample of an unknown. What is the molarity of the chloride ion in the student's unknown?

State a general rule for canceling factors in a rational : When simplifying the rational expression below, explain why it is improper to cancel out the x's. State a general rule for canceling factors in a rational expression and give an example of how this rule would be used. X+8 /x+2.

User Account

All Pages