How to evaluate total savings, Macroeconomics

Assignment Help:

Q. How to evaluate total savings?

Total savings

Total savings S(r) depends positively on the real interest rate

Remember that total savings is stated as S = SH + SG + SR, sum of net savings from the household, government and rest of the world. As with SH, S may be the observed amount of savings or total supply of savings. In the classical model, SR and SG are exogenous variables. SG = NT - G and SR = Im - X depend only on exogenous variables and are thus themselves exogenous. 

Only part of savings that is endogenous is household savings. Because household savings depend positively on real interest rate, total savings will depend positively on real interest rate. In the classical model we use S(r) to signify total savings and we have 

S(r) = SH(r) + SG + SR.

Note that SH, SG, and/or SR may very well be negative. For instance when SG is negative, G > NT and government is a net borrower.


Related Discussions:- How to evaluate total savings

National income, Y= C+I+G C= 100,000000+ 0.4yd I= 400,00000 T= 0.2+60m G= ...

Y= C+I+G C= 100,000000+ 0.4yd I= 400,00000 T= 0.2+60m G= 750, 000000 Calculate equilibrium level of income

Illustrate about perfectly competitive market firm, Why might a perfectly ...

Why might a perfectly competitive market firm be willing to run at a loss in the short run? The assumptions of a PCM firm should be outlined in order to end that the PCM firm i

What is purchasing power, What is Purchasing power One problem in usin...

What is Purchasing power One problem in using exchange rate when comparing GDP per capita between countries is that is fluctuates quite a lot. A way of avoiding dependence on

Resulting market distortion, Consider a market for fish whose market demand...

Consider a market for fish whose market demand and market supply for fish are specified as Qd = 300 - 2.5 P and Qs = - 20 + 1.5 P respectively. The government decides to impose a p

What is the remaining wip for wc, Below is a simple/familiar (I hope) works...

Below is a simple/familiar (I hope) worksheet for the "Dice Game".  Answer the following questions given the data for the each Work Center's scheduled production:

Index numbers of production, INDEX NUMBERS OF PRODUCTION  Among the com...

INDEX NUMBERS OF PRODUCTION  Among the commonly used economic indicators to monitor current trends in the economy are indices of production. The main aggregative indices used t

Important consideration in short run factor, Which of the following is an i...

Which of the following is an important consideration in short run factor-proportions trade analysis? a. Comparative advantages only occur in theory. b. Specific factors are a

Price of gasoline has recently come down, The price of gasoline has recentl...

The price of gasoline has recently come down as has the quantity. Show graphically and explain what might have caused this.

What is the price elasticity of supply, What is the price elasticity of sup...

What is the price elasticity of supply? Price elasticity of supply: The price elasticity of supply is a measure of the receptiveness of the quantity of a good supplied to pr

Differentiate comparative and absolute advantage, What is the difference be...

What is the difference between Comparative Advantage and Absolute Advantage? Difference between Comparative Advantage and Absolute Advantage: Comparative advantage: it is

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd