Question 1 Assume we have a closed economy, show the following information for the third quarter of 2020 (assume export = import = net export = 0):

National income (excluding net export) = 517,536,000,000 SAR.

Consumption equal 222,526,000,000 SAR.

Government expenditures equal 140,199,000,000 SAR.

Assume that the consumption tax rate is 15% (Value Added Tax) and 20% for capital (investment). Solve for the following (parts a to e) if Saudi Arabia is considered a closed economy:

a-Tax revenue. Hint, there are two types of tax; sales tax (VAT) and capital or investment.First, calculate investment to find tax revenue from investment.Add these two together.

b-Investment.

c-Private saving.

d-Public saving and what kind of budget does Saudi Arabia has.

e-National saving.

f-On a few words; explain how the government could increase investment level using fiscal policy.

Question 2 Briefly explain in words how does the value of money decline when inflation increased?You can provide an example if you want.