Question 1

The fictional country of Alpetra increases the income tax rate so that tax revenues increase by $70 million.Government spending also increases by $70 million and consumption falls by $10 million.If GDP remains the same and Alpetra is a closed economy,then investment

Accepted Answer

In a closed economy, GDP = C + I + G. Since GDP remains the same and government spending increases by $70 million while consumption falls by $10 million, investment must decrease by $60 million to balance the equation.

Question 2

Scenario 26-3.Assume the following information for an imaginary,open economy.
Consumption = $1,000;investment = $200;net exports = -$50;
taxes = $230;private saving = $225;and national saving = $150.
-Refer to Scenario 26-3.For this economy,GDP equals

Accepted Answer

The answer of Scenario 26-3.Assume the following information for an...

Question 3

Scenario 26-3.Assume the following information for an imaginary,open economy.
Consumption = $1,000;investment = $200;net exports = -$50;
taxes = $230;private saving = $225;and national saving = $150.
-Refer to Scenario 26-3.For this economy,government purchases amount to

Accepted Answer

The answer of Scenario 26-3.Assume the following information for an...

Question 4

Which of the following restrictions implies that private saving and investment are equal for a closed economy?

Accepted Answer

In a closed economy, the national saving is the sum of private and public saving. If the government is running neither a surplus nor a deficit, public saving is zero, making private saving equal to investment.

Question 5

Scenario 26-2.Assume the following information for an imaginary,closed economy.
GDP = $5 trillion;consumption = $3.1 trillion;
government purchases = $0.7 trillion;and taxes = $0.9 trillion.
-Refer to Scenario 26-2.For this economy,national saving is equal to

Accepted Answer

National saving is calculated as GDP minus consumption minus government purchases, which is $5 trillion - $3.1 trillion - $0.7 trillion = $1.2 trillion.

Question 6

Last quarter in a closed economy GDP was 200,000.Expenditures on capital goods such as business equipment and structures was 19,000,inventory rose 1,000,and new construction of homes was 8,000.Consumption was 135,000 and taxes were 32,000.What was public saving?

Accepted Answer

The answer of Last quarter in a closed economy GDP...

Question 7

Scenario 26-2.Assume the following information for an imaginary,closed economy.
GDP = $5 trillion;consumption = $3.1 trillion;
government purchases = $0.7 trillion;and taxes = $0.9 trillion.
-Refer to Scenario 26-2.Suppose,for this economy,the relationship between the real interest rate,r,and investment,I,is given by the equation I = 10.78 - 3.03r.(If,for example,r = 10,this means that the real interest rate is 10 percent. )The equilibrium real interest rate for this economy is

Accepted Answer

To find the equilibrium real interest rate, we need to calculate national saving, which is equal to investment in a closed economy. National saving is GDP - consumption - government purchases, which is $5 trillion - $3.1 trillion - $0.7 trillion = $1.2 trillion. Setting this equal to the investment equation, $1.2 trillion = 10.78 - 3.03r, solving for r gives r = 3.16 percent.

Question 8

In a closed economy,if Y and T remained the same,but G rose and C fell but by less than the rise in G,what would happen to private and national saving?

Accepted Answer

In a closed economy, the saving identity can be written as:

(Y - T) = (C + S) + (G - T)

Where S represents private saving and (G - T) represents government saving (or dissaving, if government spending exceeds taxes).

If Y and T remain the same, but G rises and C falls, then:

(Y - T) > (C + S) + (G - T)

or

S < (Y - T) - C - (G - T)

Since (Y - T) and G are increasing while C is decreasing, the right-hand side of this inequality is also increasing. Therefore, S must decrease.

National saving is equal to S + (G - T), so it will also decrease in this scenario.

Therefore, the correct answer is C: private saving would rise and national saving would fall.

Question 9

In a closed economy,if Y remained the same,but G rose,T rose by the same amount as G,and C fell but by less than the increase in T,what would happen to private and national saving?

Accepted Answer

The answer of In a closed economy,if Y remained the...

Question 10

Scenario 26-3.Assume the following information for an imaginary,open economy.
Consumption = $1,000;investment = $200;net exports = -$50;
taxes = $230;private saving = $225;and national saving = $150.
-Refer to Scenario 26-3.This economy's government is running a

Accepted Answer

The budget deficit is calculated as government spending minus taxes. National saving is the sum of private saving and the budget balance (government saving). Given national saving is $150 and private saving is $225, the budget balance is $150 - $225 = -$75, indicating a budget deficit of $75.

Question 11

National saving

Accepted Answer

National saving is the portion of a nation's income that is not used for consumption or government purchases, thus it is the sum of private and public saving.

Question 12

Which of the following restrictions implies that saving and investment are equal for a closed economy?

Accepted Answer

In a closed economy, by definition, saving must equal investment because there are no external trade or financial flows. This is derived from the national income accounting identity where total output (GDP) is equal to total spending, and thus saving (output not consumed) must equal investment.

Question 13

In a closed economy,if Y,C,and T remained the same,a decrease in G would

Accepted Answer

In a closed economy, if Y, C, and T remain constant, a decrease in G will lead to an increase in public saving because the government is spending less and therefore saving more. Private saving will not be affected because there is no change in disposable income, which is determined by Y, C, and T. Therefore, the correct answer is C- an increase in public saving but not private saving.

Question 14

Scenario 26-2.Assume the following information for an imaginary,closed economy.
GDP = $5 trillion;consumption = $3.1 trillion;
government purchases = $0.7 trillion;and taxes = $0.9 trillion.
-Refer to Scenario 26-2.For this economy,private saving is equal to

Accepted Answer

Private saving is calculated as GDP - consumption - taxes. So, $5 trillion - $3.1 trillion - $0.9 trillion = $1.0 trillion.

Question 15

In a closed economy,if Y is 10,000,T is 1,000,G is 3,000,and C is 5,000,then

Accepted Answer

The government budget deficit is G - T = 3,000 - 1,000 = 2,000. National saving is Y - C - G = 10,000 - 5,000 - 3,000 = 2,000, which equals investment in a closed economy.

Question 16

In a closed economy,if Y and T remained the same,but G rose and C fell but by less than the rise in G,what would happen to public and national saving?

Accepted Answer

Public saving would fall because an increase in G (government spending) with unchanged T (taxes) reduces the budget surplus or increases the deficit. National saving, which is the sum of public and private saving, would also fall because the decrease in public saving outweighs the smaller decrease in private saving due to the fall in C (consumption).

Question 17

Which of the following restrictions implies that investment exceeds private saving for a closed economy?

Accepted Answer

The answer of Which of the following restrictions implies that...

Question 18

The fictional country of Alpetra increases the income tax rate so that tax revenues increase by​ $30 million.In response,consumption falls by $8 million.If GDP and government spending remains the same and Alpetra is a closed economy,what is the change in investment?

Accepted Answer

In a closed economy, GDP = Consumption + Investment + Government Spending. Since GDP and government spending remain the same, the decrease in consumption by $8 million must be offset by an increase in investment by $8 million to keep GDP constant.

Quiz 13: Saving Investment and the Financial System: Saving and Investment in the National Income Accounts

The fictional country of Alpetra increases the income tax rate so that tax revenues increase by $70 million.Government spending also increases by $70 million and consumption falls by $10 million.If GDP remains the same and Alpetra is a closed economy,then investment

Scenario 26-3.Assume the following information for an imaginary,open economy. Consumption = $1,000;investment = $200;net exports = -$50; taxes = $230;private saving = $225;and national saving = $150. -Refer to Scenario 26-3.For this economy,GDP equals

Scenario 26-3.Assume the following information for an imaginary,open economy. Consumption = $1,000;investment = $200;net exports = -$50; taxes = $230;private saving = $225;and national saving = $150. -Refer to Scenario 26-3.For this economy,government purchases amount to

Which of the following restrictions implies that private saving and investment are equal for a closed economy?

Scenario 26-2.Assume the following information for an imaginary,closed economy. GDP = $5 trillion;consumption = $3.1 trillion; government purchases = $0.7 trillion;and taxes = $0.9 trillion. -Refer to Scenario 26-2.For this economy,national saving is equal to

Last quarter in a closed economy GDP was 200,000.Expenditures on capital goods such as business equipment and structures was 19,000,inventory rose 1,000,and new construction of homes was 8,000.Consumption was 135,000 and taxes were 32,000.What was public saving?

In a closed economy,if Y and T remained the same,but G rose and C fell but by less than the rise in G,what would happen to private and national saving?

In a closed economy,if Y remained the same,but G rose,T rose by the same amount as G,and C fell but by less than the increase in T,what would happen to private and national saving?

Scenario 26-3.Assume the following information for an imaginary,open economy. Consumption = $1,000;investment = $200;net exports = -$50; taxes = $230;private saving = $225;and national saving = $150. -Refer to Scenario 26-3.This economy's government is running a

National saving

Which of the following restrictions implies that saving and investment are equal for a closed economy?

In a closed economy,if Y,C,and T remained the same,a decrease in G would

Scenario 26-2.Assume the following information for an imaginary,closed economy. GDP = $5 trillion;consumption = $3.1 trillion; government purchases = $0.7 trillion;and taxes = $0.9 trillion. -Refer to Scenario 26-2.For this economy,private saving is equal to

In a closed economy,if Y is 10,000,T is 1,000,G is 3,000,and C is 5,000,then

In a closed economy,if Y and T remained the same,but G rose and C fell but by less than the rise in G,what would happen to public and national saving?

Which of the following restrictions implies that investment exceeds private saving for a closed economy?

The fictional country of Alpetra increases the income tax rate so that tax revenues increase by $30 million.In response,consumption falls by $8 million.If GDP and government spending remains the same and Alpetra is a closed economy,what is the change in investment?

Quiz 13: Saving Investment and the Financial System: Saving and Investment in the National Income Accounts

The fictional country of Alpetra increases the income tax rate so that tax revenues increase by $70 million.Government spending also increases by $70 million and consumption falls by $10 million.If GDP remains the same and Alpetra is a closed economy,then investment

Scenario 26-3.Assume the following information for an imaginary,open economy. Consumption = $1,000;investment = $200;net exports = -$50; taxes = $230;private saving = $225;and national saving = $150. -Refer to Scenario 26-3.For this economy,GDP equals

Scenario 26-3.Assume the following information for an imaginary,open economy. Consumption = $1,000;investment = $200;net exports = -$50; taxes = $230;private saving = $225;and national saving = $150. -Refer to Scenario 26-3.For this economy,government purchases amount to

Which of the following restrictions implies that private saving and investment are equal for a closed economy?

Scenario 26-2.Assume the following information for an imaginary,closed economy. GDP = $5 trillion;consumption = $3.1 trillion; government purchases = $0.7 trillion;and taxes = $0.9 trillion. -Refer to Scenario 26-2.For this economy,national saving is equal to

Last quarter in a closed economy GDP was 200,000.Expenditures on capital goods such as business equipment and structures was 19,000,inventory rose 1,000,and new construction of homes was 8,000.Consumption was 135,000 and taxes were 32,000.What was public saving?

In a closed economy,if Y and T remained the same,but G rose and C fell but by less than the rise in G,what would happen to private and national saving?

In a closed economy,if Y remained the same,but G rose,T rose by the same amount as G,and C fell but by less than the increase in T,what would happen to private and national saving?

Scenario 26-3.Assume the following information for an imaginary,open economy. Consumption = $1,000;investment = $200;net exports = -$50; taxes = $230;private saving = $225;and national saving = $150. -Refer to Scenario 26-3.This economy's government is running a

National saving

Which of the following restrictions implies that saving and investment are equal for a closed economy?

In a closed economy,if Y,C,and T remained the same,a decrease in G would

Scenario 26-2.Assume the following information for an imaginary,closed economy. GDP = $5 trillion;consumption = $3.1 trillion; government purchases = $0.7 trillion;and taxes = $0.9 trillion. -Refer to Scenario 26-2.For this economy,private saving is equal to

In a closed economy,if Y is 10,000,T is 1,000,G is 3,000,and C is 5,000,then

In a closed economy,if Y and T remained the same,but G rose and C fell but by less than the rise in G,what would happen to public and national saving?

Which of the following restrictions implies that investment exceeds private saving for a closed economy?

The fictional country of Alpetra increases the income tax rate so that tax revenues increase by​ $30 million.In response,consumption falls by $8 million.If GDP and government spending remains the same and Alpetra is a closed economy,what is the change in investment?

The fictional country of Alpetra increases the income tax rate so that tax revenues increase by $30 million.In response,consumption falls by $8 million.If GDP and government spending remains the same and Alpetra is a closed economy,what is the change in investment?