2 Ttle Font Paragraph 3. (6 points) about the economy for a particular year Y 10

Question

2 Ttle Font Paragraph 3. (6 points) about the economy for a particular year Y 10,000 ? 5,900 T-1,600 G 1.800 1-3000-100 r, where r is the country's real interest rate, expressed as percentage. private saving. public saving, national saving, investment, and equilibrium real interest rate. Show your work with appropriate formulas (4 points) In June 2009, at the trough of the Great Recession, the Bureau of Labor Statistics announced that of all adult Americans, 140,196,000 were employed, 14,729,000 were unemployed, and 80,729,000 were not in the labor force. Use this information to calculate (show your work with 4. a the adult population b. the labor force c. the labor-force participation rate

Explanation / Answer

3) Y=income,C=consumption,T=taxes and G= government expenditure

Private saving = Y-T-C = 10000-1600-5900 = 2500

Public saving = T-G = 1600-1800 = -200

National Saving = Y-C-G or Private saving+public saving= 10000-5900-1800 = 2300

Investment is equal to Savings= 2300

Equilibrium interest rate is the rate that clears the market at loanable funds, savings = investments

So, 2300=3000-100r

100r=3000-2300

r=700/100=7%

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