Assume That GDP (Y) Is 6,000 $C , l$ , And $r$

question 167

Essay

Assume that GDP (Y) is 6,000. Consumption (C). is given by the equation C = 600 + 0.6(Y - T). Investment (I) is given by the equation I = 2,000 - 100r, where r is the real rate of interest in percent. Taxes (T) are 500 and government spending (G) is also 500. a. What are the equilibrium values of $C , l$ , and $r$ ?
b. What are the values of private saving, public saving, and national saving?
c. If government spending rises to 1,000 , what are the new equilibrium values of $C , l$ , and $r$ ?
d. What are the new equilibrium values of private saving public saving, and national saving?

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Definitions:

Shareholders' Equity

It represents the net assets of a company, calculated as total assets minus total liabilities, and is the ownership interest of the shareholders.

Goodwill Element

The portion of the purchase price in a business combination that exceeds the fair value of the net identifiable assets of the acquired entity, representing intangible assets like brand reputation or customer relationships.

Dividend Paid

Cash or stock distributed by a company to its shareholders from its profits or reserves as a return on investment.

Unrealised Profits

Profits that have been recorded on the books through an accounting entry but have not actually been realized through the receipt of cash or other assets.