Question
Consumption is given byC= 0.8(YT) and Investment is given byI= 1000100r, whereris the real interest rate. If Output (Y) = 1600, Government Spending (G) =
Consumption is given byC= 0.8(YT) and Investment is given byI= 1000100r, whereris the real interest rate. If Output (Y) = 1600, Government Spending (G) = 200, and Taxes (T) = 100, answer the following three questions and show all your work.
(a) Is the government running a balanced budget, surplus, or deficit?
(b) What is the level of national savings?
(c) What is the real interest rate?
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Foundations of Macroeconomics
Authors: Robin Bade, Michael Parkin
8th edition
134492005, 978-0134492001
