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

a. What are the equilibrium values of $C , l$, and $r$ ?
b. What are the values of private saving, public saving, and national saving?
c. If government spending rises to 1,000 , what are the new equilibrium values of $C , l$, and $r$ ?
d. What are the new equilibrium values of private saving public saving, and national saving?

Question

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

a. What are the equilibrium values of $C , l$, and $r$ ?
b. What are the values of private saving, public saving, and national saving?
c. If government spending rises to 1,000 , what are the new equilibrium values of $C , l$, and $r$ ?
d. What are the new equilibrium values of private saving public saving, and national saving?

Quizplus · Accepted Answer

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

a. What are the equilibrium values of $C , l$, and $r$ ?
b. What are the values of private saving, public saving, and national saving?
c. If government spending rises to 1,000 , what are the new equilibrium values of $C , l$, and $r$ ?
d. What are the new equilibrium values of private saving public saving, and national saving?

Assume That GDP (Y) Is 6,000 C,lC , lC,l , And rrr

Assume That GDP (Y) Is 6,000 $C , l$ , And $r$