3) (8 points) Suppose that the economy of country B can be represented by the following...

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3) (8 points) Suppose that the economy of country B can be represented by the following macroeconomic model (assume closed economy): Y = 1000 C=0.6(Y-T) + 200 I = 90 - 20 x r G = 80 TR = 10 Spu=5 Y = Real GDP C = consumption expenditure, Y = real GDP, T = tax I = investment, r = real interest rate G = government expenditure TR = transfers Spu public savings a) What is the level of private savings? SHOW ALL YOUR WORK. (Hint: Since you cannot assume that taxes (T) are equal to zero, you have to first find the amount of taxes (T) being paid in this economy. To do so, you may want to use the public savings formula discussed in the video lecture I created for Module 3 (chapter 4)). b) Find the real interest rate that corresponds to the capital market equilibrium. SHOW ALL YOUR WORK. (Hint: Recall that at equilibrium, the investment level is equal to the total amount of savings in the economy (Spublic + Sprivate)). 3) (8 points) Suppose that the economy of country B can be represented by the following macroeconomic model (assume closed economy): Y = 1000 C=0.6(Y-T) + 200 I = 90 - 20 x r G = 80 TR = 10 Spu=5 Y = Real GDP C = consumption expenditure, Y = real GDP, T = tax I = investment, r = real interest rate G = government expenditure TR = transfers Spu public savings a) What is the level of private savings? SHOW ALL YOUR WORK. (Hint: Since you cannot assume that taxes (T) are equal to zero, you have to first find the amount of taxes (T) being paid in this economy. To do so, you may want to use the public savings formula discussed in the video lecture I created for Module 3 (chapter 4)). b) Find the real interest rate that corresponds to the capital market equilibrium. SHOW ALL YOUR WORK. (Hint: Recall that at equilibrium, the investment level is equal to the total amount of savings in the economy (Spublic + Sprivate)).

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a Here Public savings or S PU 5 T Tax Y1000 C 06YT ... View the full answer