• Suppose that the a closed economy is characterized by the following equations:: = C = 160 + 0.6YD YD =Y – T Y = 900 G=

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Suppose That The A Closed Economy Is Characterized By The Following Equations C 160 0 6yd Yd Y T Y 900 G 1 (292.17 KiB) Viewed 37 times

• Suppose that the a closed economy is characterized by the following equations:: = C = 160 + 0.6YD YD =Y – T Y = 900 G= 150 T = 100 I = 165 – 5r (a) In this economy, compute private saving, public saving, and na- tional saving. 3 points (b) Find the equilibrium interest rate. 3 points (c) Now suppose that G is increased by 50. Compute private saving, public saving, and national saving. 3 points (d) Find the new equilibrium interest rate. 3 points (e) Does the government have a budget deficit or a budget surplus? Propose a policy that will lead to a balance budget. 3 points