1. Suppose National Income (Y) = 10, Taxes (T) = 2.5, Private Savings = 3.5, and Public Savings = 1.5. Find consumption and investments.
2. An economist, has the following information about Lais Island, a closed economy, for the year 1820: Y = 10,000 C = 6,000 T = 1,500 G = 1,700 The economist also estimates that the investment function is: I = 3,300 – 100 r Where, r is Lais Island real interest rate, expressed as a percentage. Calculate: a. Private savings b. Public savings c. National savings d. Investment e. The equilibrium real interest rate.