This topic contains a solution. Click here to go to the answer

Author Question: Explain how savings equals investment in a closed capitalist economy? What will be an ideal ... (Read 75 times)

jrubin

  • Hero Member
  • *****
  • Posts: 552
Explain how savings equals investment in a closed capitalist economy?
 
  What will be an ideal response?

Question 2

Perishable goods such as milk or fruit are never used as money, because they cannot function as a
 
  A) store of value. B) unit of accounting.
  C) standard of deferred payment. D) medium of exchange.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Li Jun

  • Sr. Member
  • ****
  • Posts: 335
Answer to Question 1

The national income identity is given by Y = C + I + G + NX, where, C is the consumption expenditure, I is the investment expenditure, G is the Government Spending, and NX is the net exports. In a closed capitalist economy, Y = C + I. In other words, GDP is the sum of aggregate consumption expenditure and investment. It is also true, that in a closed economy without government spending, all the income generated will be either consumed or saved. Hence, Y = C + S. Since Y = C + S = C + I  S = I.

Answer to Question 2

A




jrubin

  • Member
  • Posts: 552
Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)


parker125

  • Member
  • Posts: 332
Reply 3 on: Yesterday
Gracias!

 

Did you know?

Giardia is one of the most common intestinal parasites worldwide, and infects up to 20% of the world population, mostly in poorer countries with inadequate sanitation. Infections are most common in children, though chronic Giardia is more common in adults.

Did you know?

Drug abusers experience the following scenario: The pleasure given by their drug (or drugs) of choice is so strong that it is difficult to eradicate even after years of staying away from the substances involved. Certain triggers may cause a drug abuser to relapse. Research shows that long-term drug abuse results in significant changes in brain function that persist long after an individual stops using drugs. It is most important to realize that the same is true of not just illegal substances but alcohol and tobacco as well.

Did you know?

On average, someone in the United States has a stroke about every 40 seconds. This is about 795,000 people per year.

Did you know?

There are more sensory neurons in the tongue than in any other part of the body.

Did you know?

As the western states of America were settled, pioneers often had to drink rancid water from ponds and other sources. This often resulted in chronic diarrhea, causing many cases of dehydration and death that could have been avoided if clean water had been available.

For a complete list of videos, visit our video library