2. The Daisy-land's economy is described as follows: Y=C+I+G; Y=10,000; G=2,000; T-3,000; C-2,000+0.5 (Y-T); I=3,000-150r. a. In this economy, compute private saving, public saving, and national saving. b. Find the equilibrium interest rate. c. Now suppose that G is increased by 1,000. Compute private saving, public saving, and national saving.

2. The Daisy-land's economy is described as follows: Y=C+I+G; Y=10,000; G=2,000; T-3,000; C-2,000+0.5 (Y-T); I=3,000-150r. a. In this economy, compute private saving, public saving, and national saving. b. Find the equilibrium interest rate. c. Now suppose that G is increased by 1,000. Compute private saving, public saving, and national saving.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Savings,investment And The Financial System

Section: Chapter Questions

Problem 5PA

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