2. Assume that GDP (Y) is 5,000. Consumption (C) is given by the equation C = 1,200 + 0.3(Y-T) – 50r where r is the real interest rate. Investment (I) is given by the equation I = 1,200 – 50r. Taxes (T) are 1,000 and government spending (G) is 1,500 a. What are the equilibrium values of C, I, and r? b. What are the values of private saving, public saving, and national saving? c. Now assume there is a technological innovation that makes business want to invest more. It raises the investment
Words: 352 - Pages: 2
state, and federal level? GDP is calculated by using a simple formula. GDP = C+G+I+NX. “C” represents consumption which is defined as the final purchase of a finished good or commodity. “G” represents the sum of government spending. “I” is the sum of all the country’s business spending on capital. “NX” is the nation’s total exports- total imports. (NX=Exports-Imports) (Gross Domestic Product - GDP, 2012) It is important to note that if you are calculating GDP you must take into account measures
Words: 863 - Pages: 4
that lego have been able to take advantage of the changing economic climate. The same is true of Domino’s pizza, who also found the recession to be a time of great growth and increased profits. As customers had less disposable income, rather than spending weekends out doing leisure activities like going to bars and restaurants, many consumers stayed at home, watching TV and this was a huge boost to the home delivery restaurant business. Take away restaurants are normally able to take advantage of
Words: 979 - Pages: 4
Macroeconomic Short Answer Questions Student’s Name: Professor’s Name: Institution Affiliation: Course Title: Date: 1.2 Suppose the consumption of a good entails rather sizable spillover benefits. How might the resulting misallocation of resources be corrected? Spillover benefits refer to both costs and/or benefits that individuals or groups of people reap through the production or consumption of goods and serves, although they are these person(s) do not take part in decisions that
Words: 1497 - Pages: 6
revenues by $1.1 trillion over the coming decade, according to a new analysis. Compared to Republican plans, which typically cut taxes, her proposal could help stabilize the nation’s ballooning debt if she also finds a way to reduce existing government spending. Related Stories [$$] GOP Candidates Need Better, Pro-Growth Tax Plans The Wall Street Journal Bernie Sanders' Tax Plan: Here's How Much the Wealthiest Americans Would Pay Motley Fool How Much in Taxes Does Bernie Sanders Want You to
Words: 363 - Pages: 2
UNION BUDGET 2012-13 16 March 2012 INTRODUCTION The Indian Government finds itself in an unenviable economic position at the current moment. First, the tight monetary policy adopted by the RBI in the past months has led to a dip in GDP growth rates, from the 9% figure projected in the previous budget to a modest 6.9%. Second, there has been an increase in the fiscal deficit, which can be explained by lower than expected revenue collections from taxes (due to slowing growth), low disinvestment
Words: 2485 - Pages: 10
have gone through the short-term recovery in 2010 till the return of the bad results in 2012 and negative predictions for the future. We have analyzed the background of Italy economy, the main economic measures and the actions taken by the Italian government to recover the financial situation of the country. In the following chapters we have reviewed the most important financial ratios as gross domestic product, public debt, budget deficit, inflation and others. We have analyzed the historical data
Words: 3072 - Pages: 13
up of the government approvals and sanction after 2014 there has been has been liberalisation of foreign direct investment in certain sectors have led to an increase in the economic growth in India. After 2015 the average middle class household 's income is expected to triple. Almost around 57% of the GDP constitutes of consumer spending which is double that what investments contribute towards GDP. The increasing Indian urban population is expected to lead to an increase in spending on discretionary
Words: 2916 - Pages: 12
Troubled Assets Relief Program: Right or Wrong Michael J. Kneece Midlands Technical College ECO-210-B01 Instructor: Kenneth Craib Troubled Assets Relief Program: Right or Wrong In 2008, when the “Great Recession” happened, Congress passed the Troubled Assets Relief Program (TARP). The Troubled Assets Relief Program allocated over $700 billion to aid in “emergency” loans to “critical financial and other US firms”, that were considered “too big to fail.” While the Troubled Assets Relief Program
Words: 1162 - Pages: 5
aid? Each side to the question has extraordinary points of why food stamps are good, or bad. Food stamps are needed to feed millions of families in America and the world, but they are mistreated by some people who are lazy and would rather take a government check at the end of the day instead of work. Even though food stamps raise the unemployment and obesity rates, they still aid people who can not afford them and are high in demand while the economy is low. Food stamps have
Words: 1504 - Pages: 7
