Assignment 3 - Macroeconomics 314 Assignment 3 Numerical...

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Macroeconomics 314 Assignment 3 Numerical Problems: 1. a. 1.1(50,000-Cd)-12600+50,000-Cd=0 Cd=44,000 She should consume $44,000 each year. Sd=income-Cd Sd=50,000-44,000=6,000 She should save $6,000 this year. b. 1.1(54,000-Cd)-12600+54,000-Cd=0 Cd=48,000 She should consume $48,000 each year. Sd=54,000-48,000=6,000 She should save $6,000 this year. The amount she should consume increases by $4000, while the amount she should save this year remains constant. c. 1.1(50,000-Cd)-12600+54,200-Cd=0 Cd=46000 She should consume $46,000 each year. Sd=50,000-46,000=4,000 She should save $4,000 this year. The amount she should consume increases by $2000, while the amount she should save this year decreases by $2000. d. 1.1(50,000+1050-Cd)-12600+50,000-Cd=0 Cd=44,550 She should consume $44,550 each year. Sd=51,050-44,550=6,500 She should save $6,500 this year. The amount she should consume increases by $550, while the amount she should save this year increases by $500. e. 1.1(50,000-Cd)-14,700+50,000-Cd=0 Cd=43,000
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She should consume $43,000 each year. Sd=50,000-43,000=7,000 She should save $7,000 this year. The amount she should consume decreases by $1000, while the amount she should save this year increases by $1000. f.
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This note was uploaded on 05/06/2008 for the course ECON 3140 taught by Professor Mbiekop during the Fall '07 term at Cornell University (Engineering School).

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Assignment 3 - Macroeconomics 314 Assignment 3 Numerical...

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