SOLVED

21) On the graph above, assuming that G = 0 and NX = 0, the labeled point at which saving is lowest is point ________. A) A B) B C) G D) H E) not inferable from the information given 22) If planned expenditure is below output, as the economy approaches equilibrium, ________. A) planned expenditure is falling B) output is rising C) saving is rising D) all of the above E) none of the above 23) If planned expenditure is below output, as the economy approaches equilibrium, ________. A) planned expenditure is rising B) output is rising C) saving is rising D) all of the above E) none of the above            24) Using the values in the table above, and assuming that the real interest rate equals 4, calculate equilibrium values for consumption, household saving, investment, and net exports. Use these values to confirm that the goods market is in equilibrium. 25) In the text, the equivalence of the goods market equilibrium in the IS model to the equilibrium in which desired investment equals desired saving is demonstrated, assuming that both government purchases and net exports are zero. Demonstrate the equivalence when both G and NX are non-zero.