answer following problems
Problem 1
Suppose GDP equals $300 trillion, consumption equals $24 trillion, the government spends $3 trillion and has a budget deficit of $500 billion.
- Find public saving, taxes, private saving, national saving, and investment.
Problem 2
You take $500 that you held as currency and put it into the banking system. The reserve ratio is equal to 20%.
- Calculate the money multiplier.
- By how much will increase the total amount of deposits in the banking system?
- By how much will increase the money supply?
Problem 3
At the begening of 2018, a town has 152,000 employed people and 8000 unemployed people. The remaining 40,000
people in the town are not in the labor force.
Based on these numbers:
- Calculate the town’s unemployment rate
- Calculate the town’s labor force participation rate
- Calculate Suppose that 10,000 people decide to join the labor force. Of these 10,000 people 7,800 find jobs. What is the unemployment rate at the end of 2018?