Assume that the officials in Ecoland have compiled the following information about their economy for last year:
Y = 10,000
C = 6,000
T = 1,500
G = 1,700
The government uses the following equation for the investment function:
I = 3,300 – 100r
Where r = equal to Ecoland’s real interest rate.
Calculate, and then explain, the following:
Private saving
Public saving
National saving
Investment
The equilibrium real interest rate