Question 7

The table below shows aggregate values for a hypothetical economy. Real GDP is equal to potential GDP. Figures are billions of dollars.

 

          Potential GDP                                     950

            Net tax revenue                                   125

            Government purchases                        140

            Desired investment                               10

            Desired consumption                          800

 

7.1 What is the level of private saving?

7.2 What is the level of public saving?

 

7.3 What is the level of national saving?

7.4 Is the interest rate at its equilibrium level? How do you know?