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Assume an economy with 1000 consumers. Each consumer has income in the current period of 50...

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Economics

Assume an economy with 1000 consumers. Each consumer has incomein the current period of 50 units and future income of 60 units andpays a lump-sum tax of 10 units in the current period and 20 unitsin the future period. The market real interest rate is 8%. Of the1000 consumers, 500 consume 60 units in the future, while 500consume 20 units in the future.

(a) Determine each consumer’s current consumption and currentsaving

(b) Determine aggregate private saving, aggregate consumption ineach period, government spending in the current and future periods,the current-period government deficit, and the quantity of debtissued by the government in the current period

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ANSWER A Each consumers current consumption and current saving There are two sorts of individuals first sort who expend 60 units in future and second sort who devours 20 units later on There are 500 customers of type 1 and 500 purchasers of type 2 Decide every purchasers present utilization and current    See Answer
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