Question: 1. Suppose GDP is $22 trillion, government spending is $6 trillion, public saving is $1 trillion, and private saving is $3 trillion. Assuming this economy is closed, calculate consumption, taxes, national saving, and investment. Explain your answers.
2. An investor has a project that would cost $60 million today and yield a payoff of $10 million in the end of year 1, $20 million in the end of year 2, $30 million in the end of year 3, and $30 million in the end of year 4. Should this investor undertake the project if the interest rate is 10%? Explain your answer and calculations clearly.
3. Assume that you have deposited some amount of money last year and the nominal interest rate was 10 percent. After one year, you learn that you have $1,595 in your account. How much money did you deposit initially? Explain your answers.