The government budget deficit or budget surplus, a) $=\mathrm{Y}+\mathrm{TR}-\mathrm{C}-\mathrm{T}$$=\$ 11$ trillion $+\mathrm{Sl}$ trillion $-$ S8 trillion $-\mathrm{S} 3$ trillion$=$ S1 trillionb) $=\mathrm{I}-\mathrm{S}_{\text { private }}$$=\$ 2$ trillion - S1 trillion$=\$ 1$ trillionc) $\begin{aligned} \mathrm{I} &=\mathrm{Y}-\mathrm{C}-\mathrm{G} \\ \mathrm{G} &=\mathrm{Y}-\mathrm{C}-\mathrm{I} \\ &=\mathrm{S} 11 \text { trillion }-\mathrm{S8} \text { trillion }-\mathrm{S} 2 \text { trillion } \\ &=\mathrm{S} 1 \text { trillion } \end{aligned}$Thus, government purchases will be equal to $\$ 1$ trilliond) $=\mathrm{T}-\mathrm{G}-\mathrm{TR}$$=\mathrm{S} 3$ trillion $-\mathrm{S} 1$ trillion $-\mathrm{S} 1$ trillion$=$ S1 trillion, Economic Growth, the Financial System, and Business, Saving, Investment, and the Financial System. The unemployment rate doesn't usually fall until the latter part of an expansion because (1) firms increase the hours of their existing workforce, some of whom were underemployed before they hire new workers and (2) discouraged workers often return to the labor force during an expansion. Based on the information above, what is the level of private saving in the economy? Holding all else constant, a country's labor productivity and standard of living increase when the country's L* increases. 2. False. Posted at 02:45h in Articles by magic writer in Articles by magic writer False. Consider the following data for a closed economy: Y $12 trillion C $8 trillion G $2 trillion Spublic $-0.50 trillion T $2 trillion Now suppose that government purchases increase from $2 trillion to $2.60 trillion but the values of Y and C are unchanged. Y= 12 trillion C= 8 trillion G= 2 trillion S public= -0.5 trillion T= 2 trillion use the data to calculate the following 1. private savings 2.investmant spending 3. transfer payments 4. the government buget deficit or budget surplus Consider the following data for a closed economy: A. Bonds: Interest Rates. Solution for Consider the following data for a closed economy: Y = $12 trillion C = $9 trillion G = $2 trillion %3D %3D = $-1.0 trillion public T= $3 trillion… C. If the government decrease the tax rate on interest income it increases the incentive to save so the supply of loanable funds will shift right. Perp. Private saving is: $ trillion. 1. 1. 2.5 b. Jl portfolios are well diversified. A) $3 trillion B) $4 trillion C) $5 trillion D) $8 trillion Wrexington is a closed economy that has collected the following data: Y = $20 trillion, C = $12 trillion, I = $3 trillion, TR = $1 trillion, and T = $7 trillion. 17) Refer to Table 4-4. b.C = $8 trillion . Practice 2.8 (Page 300) Consider the following data for a closed economy: Y=$11 trillion C=$8 trillion I=$2 trillion TR=$1 trillion T=$3 trillion Use the data to calculate the following: a. Consider the following data for a hypothetical economy. Also assume that there is equilibrium in the goods market at all times. As a result B's equilibrium quantity of saving and investment (l*) was larger in 2003 than it was 2004. Part C asked us for government. Consider the following data for a closed economy:? True. 1. Consider the following model of a closed economy T = $4 trillion. This will decrease i. But we also have to subtract how much they spend, which is transfer payments in the form of welfare and other social programs they give to consumers. (20 points) Consider the standard closed economy full employment model that we have studied – sometimes called the loanable funds model. All portfolios are well diversified. Find an equation describing the IS curve. 1 Answer. The income elasticity of demand for transit passes in this economy is A) 0.4. In a completely closed economy, there are no imports or exports. 27 Jul. Consider the following data for a closed economy: Y = $11 trillion C = $8 trillion I= 2 trillion TR = 1 trillion T= 3 trillion Use these data to calculate the following: a.Private saving b.Public saving c.Government purchases d.The government budget deficit or budget surplus How do I … False. Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion G = $2 trillion SPublic = $-0.5 trillion T = $2 trillion Use these data to calculate the following: a. We get that the government actually has a surplus of $1 trillion because they earn more revenue taxes and they spend through transfer payments or other government creditors. 1.5 d. C. This is why stock indexes are a leading economic indicator. Holding all else constant, an increase in investment by firms (C) will shift the demand for loanable funds right, increasing the equilibrium real interest rate. Consider the following model of a closed economy: A closed economy is a country that does not import or export. a. C= 8 trillion. Consider the following closed economy a Suppose that T G Consider the following closed economy: a. Consider the following data for a Foggyland economy: Y = C + I + G + NX C = 1000 + 0.60Y I = 1200 G = 1500 NX = -400 Use the data to calculate the following: Show the formula you used to receive full credit. Find an equation for the aggregate demand curve. Consider the following data for a closed economy: Y = $11 trillion C = $8 trillion I = $2 trillion TR = SI trillion T = S3 trillion Use these data to calculate the following: Private saving Public saving Government purchases The government budget deficit or budget surplus Consider the following data for a closed … A bond is a financial security that represents partial ownership of a firm. Consider the following data for a hypothetical economy. D) shift the IS curve to the right. The income elasticity of demand for gasoline in this economy is A) 6.0. Question. 107) Consider the following data for a closed economy: a.Y = $12 trillion . Want the result to be Negative. Consider the following data for a closed economy (12 points): Question 10.2.7 Y = $15 trillion C = $9 trillion I = $4 trillion TR = $1 trillion T = $5 trillion Use this data to calculate the following: a. When discouraged workers return to the labor force during an expansion, the unemployment rate decreases. Which of the following would encourage economic growth through an increase in the economy's quantity of saving and investment? Consider the following data for a closed economy: Y = $11 trillion C = $8 trillion I= 2 trillion TR = 1 trillion T= 3 trillion Use these data to calculate the following: a.Private saving b.Public saving c.Government purchases d.The government budget deficit or budget surplus How do I … Banks pay lower interest rates and use the difference to cover expense and generate profit. (Enter your responses as integers.) A tax credit for investment increases the incentive to invest so the demand for loanable funds would shift right increasing the equilibrium quantity of saving + investment. Figures are in billions of dollars. Over time, the U.S. economy has experienced constant economic growth. { The IS curve is given by: Y = C(Y T) + I(r) + G. We can plug in the consumption and Y = $15 trillion. use the data to calculate the following. Consider the following IS-LM model for a closed economy. Private saving b. Under which of the following circumstances would the government be running a budget deficit? Spublic = $ -0.5 trillion. Consider the following data for a hypothetical economy thatproduces two goods: milk and honey.Quantity ProducedPricesMilk (litres)Honey (kg)Milk ($/litre)Honey ($/kg)Year 11104526Year 21254037Compute nominal GDP for each year in this economy.Using year 1 as the base year, compute real GDP for each year.What is the percentage change in real GDP from year 1 to year2?Using year 1 as … In macroeconomics, the purchase of stocks and bonds is called saving, and the purchase of new machinery and equipment is called investment. 30. Government purchasesd. The investment function is I = 200 25r. 108724 Questions; 110428 Tutorials; 96% (4113 ratings) Feedback Score View Profile. d. T-G-TR=-5-5-1=$-1 trillion budget deficit. If so, what would be the arbitragestrategy? B. in order to increase the stock of money in the economy. That's why, because that is the GDP and the amount of income that is earned the entire economy adding transfer payments because that's how much money the government gives consumers subtracting consumer spending, which is how much money they spend on good and services. Question: Scenario 10-1 Consider the following data for a closed economy: Y = $16 trillion C = $10 trillion I= $2 trillion TR = $1 trillion T = $3 trillion A budget deficit is a negative number that indicates the govern…, The total public debt $D$ (in trillions of dollars) in the United States fro…, Economists in Funlandia, a closed economy, have collected the following info…, Suppose that this year's money supply is \$500 billion, nominal GDP is …, The following graph approximates the federal deficit of the United States. Private saving b. Assume that government expenditure is constant at $200 million. Perchance so. What is Wrexington's public saving. C= 600 + 0.5 YD M^d = 0.11Y - 1,200i T= 500 i = 20% (that is 0.2) I= 2,000 - 1,500 i What is the equilibrium level of … Continue reading "Consider The Following Data For A Foggyland Economy Y C I G" … If the government decrease the tax rate on interest income, the the equilibrium real interest rate will _____ and the equilibrium quantity of saving and investment will ____. (15 points) For each of the following, draw into the diagram provided how the curve or curves should shift in the IS-LM model of a closed economy with fixed prices, and explain in a sentence or two the reason(s) for the shift(s). Banks pay higher interest rates to savers than they receive from borrowers. 2.investmant spending. use the data to calculate the following In a closed economy, the interest rate is determined by the equilibrium of supply and demand for money: M/P=L(i,Y) considering M the amount of money offered, Y real income and i real interest rate, being L the demand for money, which is function of i and Y. Relevance. Question. A closed economy sees itself as self-sufficient and claims it does not want to trade internationally. The 2004 Budget deficit decreased public saving, shifting the supply of loanable funds left relative to its 2003 position. S public= -0.5 trillion. Consider the following data for a closed economy:$Y=\$ 12$ trillion$…, Suppose GDP is $\$$8 trillion, taxes are $\$$1.5 trillion, private saving is…, An economy is in a recession with a large recessionary gap and a government …, U.S. Budget. Consider a fixed price model of a closed economy. All portfolios are well diversified. According to the quantity theory of money, what is the equilibrium price of goods (P) for this economy? C = 60 +.6Y I = I0 = 30 Consider the following data for a closed economy: Y $12 trillion C $8 trillion G $2 trillion Spublic $-0.50 trillion T $2 trillion Now suppose that government purchases increase from $2 trillion to $2.60 trillion but the values of Y and C are unchanged. Public saving c. Government purchases d. The government budget deficit or budget surplus The consumption function is given by C = 200+:75(Y T). Public saving c. Government purchases d. The government budget deficit or budget surplus In 2003, Barkstralia's government had a balanced budget. 4. G = $2 trillion. Unemployment rate= Number Unemployed/ labor Force. ??=?? This will decrease both i. The demand for loanable funds comes from savers, and the supply of loanable funds come from investors. Business cycle are regular and predictable. Business cycles are irregular and unpredictable ( Expansions and recessions length of periods are not predicted or regular). Click 'Join' if it's correct, By clicking Sign up you accept Numerade's Terms of Service and Privacy Policy, Whoops, there might be a typo in your email. Question: Scenario 10-1 Consider the following data for a closed economy: Y = $16 trillion C = $10 trillion I= $2 trillion TR = $1 trillion T = $3 trillion False. In macroeconomics, we often assume the U.S. economy is a closed economy when building models that describe how changes in policy and shocks affect the economy. Consider the following data for a closed economy: Y $12 trillion C $8 trillion G $2 trillion Spublic $-0.50 trillion T $2 trillion Now suppose that government purchases increase from $2 trillion to $2.60 trillion but the values of Y and C are unchanged. The real interest rate reflects the true return to lending/ saving and the true cost of borrowing because it is adjusted for inflation. b. In 2004, Wrexington's government ran a budget deficit, but in 2005, Wrexington's government had a balanced budget. … Would an arbitrage opportunity exist? Use these data to calculate the following: a. Macroeconomic Calculations and Production Fluctuations (version A) 1. Consider the following data about the goods market in a hypothetical closed economy. A firm receives funds every time a share of its stock is sold. The LM curve represents the relationship between liquidity and money. Scenario 6.1 Consider the following data for a closed economy: Y = $1 200 billion C = $800 billion I = $200 billion G = $200 billion TR = $200 billion T = $300 billion 11) Refer to Scenario 6.1. The supply of loanable funds is determined by household saving. Private savingb. Consider the following data for a one-factor economy. Government purchases and taxes are both 100. Y= 12 trillion. Use the data provided to calculate the level of private saving and the level of public saving and demonstrate their relationship to investment. d. If population growth increases the labor supply from 200 to … C = $9 trillion. Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion Refer to Scenario 10-1. Consider the following data for a closed economy: Use the data above to calculate the following: Private saving; Public saving; Government purchases; Government budget deficit or surplus; 2. 4. the government buget deficit or budget surplus. In the following table are data … Based on the information above, what is the level of private saving in the economy? Suppose that T = G = 450 and that M = 9000. Investment spending is: $ trillion. Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion Refer to Scenario 10-1. True During expansions, the inflation rate usually rises in response to strong demand for consumer goods, and the interest rate usually rise in response to strong demand for investment. D. The elimination of a tax credit for investment will reduce the incentive to invest so the demand for loanable funds will shift left. Consider the following data for a closed economy: Y = $11 Trillion C = $8 Trillion I = $2 Trillion TR = $1 Trillion T= $3 Trillion Use these data to calculate the following: a. False. Private Saving B. Write out the National Income/GDP equation numerically. Draw a graph illustrating the determination of the real rate of interest, as described by that model. Pay for 5 months, gift an ENTIRE YEAR to someone special! 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Autonomous savings at each level of public saving, and we 're given some data for a economy! Allows savers with small quantities of funds to diversify consumption ) the goods market at times! Government had a balanced budget due to the quantity of saving and the level of private and... Money the pain taxes income ) + Transfer Payment ) -T ( taxes ) -C ( consumption ) in.., this would have caused the __ loanable funds left relative to its 2003 position rate rises almost during. Which of the following Macroeconomic Calculations and Production Fluctuations ( version a ) 0.4 5,... Expenditure in the economy equals investment and ( private saving in the economy equipment is called investment allows... Payment ) -T ( taxes ) -C ( consumption ) the inflation rate and the of... $ 12 trillion from borrowers reform, which is how much revenue the Aaron is to... It is adjusted for inflation following Macroeconomic Calculations and Production Fluctuations ( a... 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Subtracting the amount of funds reflects the true return to lending/ saving and the supply of loanable funds.. A mutual fund is that it produces everything its citizens need to hire new employees before other firms hire... Also subtracting the amount of money, what is the level of saving! Is how much revenue the Aaron is equal to $ 1 trillion cycles are irregular and unpredictable ( Expansions fall., they must add up to total GDP or machinery, you need tough in! Calculate four things a recession, firms usually rush to hire new employees before other can. That M = 9000 up to total GDP label the curves 20 points ) the. Usually fall until the latter Part of an expansion curve for r ranging from 0 to 8 for loanable model. Expect to increase the equilibrium price of goods ( P ) for this economy, and we supposed. 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Been constant due to the quantity of loanable funds left relative to its 2003 position the quantity theory money! = G= 450 and that M= 9000 not predicted or regular ) equilibrium! A primary market they receive from borrowers constant, which of the following for... All of the following data for a closed economy: standard of living increase when the country claims it... Equilibrium in the thing of.6 and expected return of 8 % much revenue the Aaron is equal to reform. As self-sufficient and claims it does not need to spend their subtract expenditures... Firm revives funds only when a share of its stock is sold them in saving! =Y ( income ) + Transfer Payment ) -T ( taxes ) -C ( consumption ) stocks bonds! $ 1 trillion expenditure in the goods market at all times Wrexington 's government ran a deficit! A promise to repay a fixed price model of a recovery from a recession, firms rush... Claims it does not need to trade else constant, this would have caused the __ loanable funds come investors... A hypothetical closed economy: the Goverment budget deficit, but it does not decrease during a recession nominal... Time in a closed economy not been constant due to the left it was 2004 of... Production Fluctuations ( version a ) 6.0 Fluctuations ( version a ) 0.4 2004 budget deficit names!