Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Apps courses.kpu.ca > YouTube ' Gmail 6 Om - Red VelverliilE'... Economics 1250 Final Term ProjectFall.pdf 5. Suppose that you have the following information for
Apps courses.kpu.ca > YouTube ' Gmail 6 Om - Red VelverliilE'... Economics 1250 Final Term ProjectFall.pdf 5. Suppose that you have the following information for an economy. GDP = $1000, C = 3800, G = $100, X = $50,1M = $30, '1' = $50, and TR = $20 a) What is investment in this economy? lnvesu-nent: b) What is private savings? Private Savings: c) What is government savings? Government Savings: d) What is the capital inow in this economy? Capital inow: 6. The following T-account shows the assets and liabilities of all banks in Canada. The reserve ratio is 10%. All nancial transactions occur within the banking system. No one holds cash. Asses Liabllitles Actual reserves $200 million Deposits $1000 million Loans $700 million Bonds $100 million a) What is the amount of total desired reserves? What is the amount of excess reserves? Required Reserves: Excess Reserves: b) What will be the nal T-account after all of the excess reserves are loaned out? Assels Liabilities Actual reserves Deposits Loans Bonds c) After all the multiplier processes have taken place, what will be the change in money supply? Change in MS 1 '3 Reading List Apps courses.kpu.ca YouTube ' mail 6 Om - RedVereilEll': Economics 1250 Final Term ProjectFall.pdf 7. Suppose that you have an economy where the government does not have a decit and the demand for loanable funds and supply of loanable funds are as follows (if r = 02, it is an interest rate of 20%): Demand: r = 0.2 0.0001Q Supply: r = 0.0001Q a. Graph the demand and supply of loanahle funds __> b. What is the equilibrium interest rate and equilibrium quantity in the market? Interest rate: Quantity: c. Now the government has a budget decit that causes the supply of loanable funds to change to r = 0.01 + 0.0001Q. What is the new equilibrium interest rate and quann'ty? interest rate: Quantity: (1. Is there crowding out in this economy with the new decit? If so, calculate the amount that private investment is being crowded out and explain why it is happening. Crowding out
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started