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

Unemployment rate for each country, The following Table B presents the 2010...

The following Table B presents the 2010 population, employment, and unemployment data among working age persons for several countries. a. Calculate the number of people in the lab

Federal funds rate and supply and demand analysis, If banks expect an unusu...

If banks expect an unusually large increase in withdraws from checking deposit accounts in the near future, what would happen to the federal funds rate, borrowed reserves and nonbo

Quiz, To overcome the stagnant growth it was experiencing for the past 10-1...

To overcome the stagnant growth it was experiencing for the past 10-15 years, Japan undertook which of the following measures? Answer Undertook programs to build infrastructure

The effect of market for milk, 1a. Show on the market for milk the effect o...

1a. Show on the market for milk the effect of the introduction of BGH (bovine growth hormone). 1b. Show on the market for cheese the impact of what happened in the milk market.

OPEN-MARKET MACROECONOMICS, Macroeconomics: Question 1 and 2 relate to cont...

Macroeconomics: Question 1 and 2 relate to content and skills covered --- OPEN-MARKET MACROECONOMICS: BASIC CONCEPTS , International Trade and Exchange Rates Question 3 relates to

Growth of trade, Growth of Trade: As far as the growth of exports and ...

Growth of Trade: As far as the growth of exports and imports are concerned,  it is evident  from Table 17.2  that India has performed better than the world growth  rates  in

How taxes and subsidies impact market efficiency, Analyze how taxes and sub...

Analyze how taxes and subsidies impact market efficiency. Speculate if market efficiency would be increased or decreased without issues of taxes and subsidies. Justify your respons

Propensity, different determinants of propensity to consume

different determinants of propensity to consume

True or False, 1) Consumption is positively related to stock market wealth ...

1) Consumption is positively related to stock market wealth but negatively related to taxes and tax rates.

Find out the total economic surplus, The manager of the world famous Koala ...

The manager of the world famous Koala Caves offers a tour each afternoon starting at 3pm. The caves can be shown to only four people per day without undermining their ecology. Occa

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