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b. Explain the difference between saving and investment as defined by a macroeconomist.
c. Which of the following situations in c (i) & c (ii) represent investment? Saving? Explain
(i) Your family takes out a mortgage and buys a new house.
(ii) You use your paycheque to buy stock in Sagicor Financial Services.
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- Which of the following situations represents investment? Saving? ExplainYour family takes out a mortgage and buys a new house. You use your paycheque to buy stock in Sagicor Financial Services.c. Which of the following situations in c (i) & c (ii) represent investment? Saving? Explain (i) Your family takes out a mortgage and buys a new house. (ii) You use your paycheque to buy stock in Sagicor Financial Services,Economics Which of the following situations represent saving? a) Mike borrows $8,000 from a bank and buys a truck for his personal use. b) John uses his $500 paycheck to buy stock in Microsoft. c) Austin borrows $9,000 from a bank to buy a truck to use in his lawn mowing business. d) Your roommate earns $2000 and spends it
- Economics 1) Draw a saving-investment diagram to show how each of the following changes shifts the IS curve. (a) Future income rises. (b) The future marginal productivity of capital increases. (c) Government purchases decrease temporarily. (d) The effective corporate tax rate increases.A friend asks you to explain the difference between saving and investment. Explain the difference.Make sure to show your work to get credit. 1. Assume: Yd = $194,000 b = .90 a = $ 8,000A)What is consumption (C) ?B)What are savings (S) ? C)What is APC ?D)What is APS ?
- In the language of macroeconomics, a person or firm purchases new capital. occurs when a person's income exceeds his consumption, while Which of the following situations represent saving? Check all that apply. You use your $200 paycheck to buy stock in AT&T. Your family takes out a mortgage and buys a new house. You borrow $1,000 from a bank to buy a car to use in your pizza delivery business. Your roommate earns $100 and deposits it in his account at a bank. occurs when25) Use a saving—investment diagram to explain what happens to saving, investment, and the real interest rate in each of the following scenarios in a closed economy. (a)In an agricultural economy, great weather this year promises a bumper crop next year, leading citizens to expect higher income next year. (b)Government regulations going into effect next year will reduce the marginal product of capital. (c)The government increases lump-sum taxes on citizens. 26) An economy has full-employment output of 5000. Government purchases are 1000. Desired consumption and desired investment are given by Cd = 3000 - 2000r + 0.10Y Id = 1000 - 4000r where Y is output and r is the expected real interest rate. (a)Find the real interest rate that clears the goods market. Assume that output equals full-employment output. (b)Calculate the amount of saving, investment, and consumption in equilibrium. (c)If a shock to wealth causes desired consumption to decline by 200 (so that…Explain the difference between saving and investment as defined by a macroeconomist. Which of the following situations represent investment and which represent saving? Explain.a. Your family takes out a mortgage and buys a new house.You use your $200 paycheck to buy stock in Africel.Your roommate earns $100 and deposits it in his account at a bank.You borrow $1,000 from a bank to buy a car to use in your pizza delivery business.The interest rate is 7 percent. Use the concept of present value to compare $200 to be received in 10 years and $300 to be received in 20 years.A company has an investment project that would cost $10 million today and yield a payoff of $15 million in 4 years.Should the firm undertake the project if the interest rate is 11 percent? 10 percent? 9 percent? 8 percent?Can you figure out the exact cutoff for the interest rate between profitability and nonprofitability?
- 3. The meaning of saving and investment Classify each of the following scenarios listed in the table below using the macroeconomic definitions of saving and investment. Saving Investment Becky purchases new mixers for her commercial bakery. Alex purchases a certificate of deposit at his bank. Eileen purchases shares of stock in Bayzer, a pharmaceutical company. Clancy purchases a new townhouse in Hartford.Assume: Yd = $ 5000 billion b = .95 a = $ 520 billionA)What is consumption (C) ?B)What are savings (S) ? C)What is APC ?D)What is APS ?Describe the Investment Decision for a Simple Investment?
