Posted by **Abdul** on Tuesday, May 4, 2010 at 1:32pm.

Question 02:

Consider an economy described by the following equations:

Y=C+I+G

Where, Y = 6,000, G = 2,000, T = 2,000

C = 300 + 0.50 (Y-T)

I = 2,000 – 60r

In this economy, compute:

a. Private saving

b. Public saving

c. National saving

d. The equilibrium interest rate

e. The amount of equilibrium level of investment

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