(SAVING, INVESTMENT AND THE FINANCIAL SYSTEM)

Q4. Explain the difference between saving and investment as defined by a macroeconomist. Which of the following situations represent investment? Saving? Explain. a. Your family takes out a housing loan nd buys a new house. b. You use your RMZOD paycheck to buy stock in TM. C. Your roommate earns RM100 and deposits it in her account at a bank. d. You borrow RM1.000 from the bank to buy a motorbike to use in your pizza delivery business. Q5. Suppose GDP is RM8 billion, taxes are RM1.5 billion, private saving is RMO.5 billion, and public saving is RMO.2 billion. Assuming this economy is closed, calculate consumption, government purchases, national savings, and investment. Q6. Suppose that Intel is considering building a new integrated chip (IC) factory in Cyberjaya. a. Assuming that Intel needs to borrow money in the bond market, why would an increase in interest rates affect Intel's decision about whether to build the factory? b. If Intel has enough of its own funds to nance the new factory without borrowing, would an increase in interest rates still affect Intel's decision about whether to build the factory? Explain