Consider the following data for a closed economy: Y = $11 trillion C = $8 trillion I= 2 trillion TR = 1 trillion T= 3 trillion Use these data to calculate the following: a.Private saving b.Public saving c.Government purchases d.The government budget deficit or budget surplus How do I … In macroeconomics, the purchase of stocks and bonds is called saving, and the purchase of new machinery and equipment is called investment. c.I= $3 trillion . In fact, it believes it does not need to trade. Consider the following data for a one-factor economy. Over time, the U.S. economy has experienced constant economic growth. Holding all else constant, which of the following is incorrect? C = 60 +.6Y I = I0 = 30 A closed economy sees itself as self-sufficient and claims it does not want to trade internationally. b. Jl portfolios are well diversified. Pay for 5 months, gift an ENTIRE YEAR to someone special! 36919 Questions; 36993 Tutorials; 96% (1842 ratings) Feedback Score View Profile. Consider the following data for a closed economy: Y $12 trillion C $8 trillion G $2 trillion Spublic $-0.50 trillion T $2 trillion Now suppose that government purchases increase from $2 trillion to $2.60 trillion but the values of Y and C are unchanged. Consider the following data for a one-factor economy. A decrease in autonomous savings at each level of disposable income will A) shift the LM curve down. He asks us to calculate public seedings. In a closed economy, the interest rate is determined by the equilibrium of supply and demand for money: M/P=L(i,Y) considering M the amount of money offered, Y real income and i real interest rate, being L the demand for money, which is function of i and Y. Draw a graph illustrating the determination of the real rate of interest, as described by that model. Consider the following data for a closed economy: Y $12 trillion C $8 trillion G $2 trillion Spublic $-0.50 trillion T $2 trillion Now suppose that government purchases increase from $2 trillion to $2.60 trillion but the values of Y and C are unchanged. Consider a fixed price model of a closed economy. Practice 2.8 (Page 300) Consider the following data for a closed economy: Y=$11 trillion C=$8 trillion I=$2 trillion TR=$1 trillion T=$3 trillion Use the data to calculate the following: a. The demand for loanable funds comes from savers, and the supply of loanable funds come from investors. Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion G = $2 trillion SPublic = $-0.5 trillion T = $2 trillion Use these data to calculate the following: a. Consider the following model of a closed economy 2. Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion G = $2 trillion Spublic = $negative 0.50 trillion T = $2 - 1341400… We get that the government actually has a surplus of $1 trillion because they earn more revenue taxes and they spend through transfer payments or other government creditors. … Over time, the U.S. economy has experience economic growth but has not been constant due to the business cycle. 10. Posted at 02:45h in Articles by magic writer in Articles by magic writer False. use the data to calculate the following Spublic = $ -0.5 trillion. Government purchases is one component of GDP, and we know that GDP is equal to the sum of consumer spending, government expenditures in investment spending and we can rewrite that expression or equation and such. b.C = $8 trillion . 1 Answer. Assume that government expenditure is constant at $200 million. Consider the following data for a closed economy: Y = $11 trillion C = $8 trillion I = $2 trillion TR = $1 trillion T = $3 trillion Use the data above to calculate the following: Private saving Public saving Government purchases Government budget deficit or surplus Based on the information above, what is the level of private saving in the economy? False. Problem 2.6: Consider an economy that produces and consumes bread and automobiles. According to the quantity theory of money, what is the equilibrium price of goods (P) for this economy? Solved Expert Answer to Consider the following data for a one-factor economy. For several decades the interest rate continues to decline in all regions except High-Income region largely because of the demographic trends we saw in Section 5. If the government eliminates a tax credit for investment, then the equilibrium real interest rate will ___ and the equilibrium quantity of saving and investment will __-. Consider the following data for a closed economy: Y=\ 12 trillion C=\ 8 trillion G=\ 2 trillion S_{\text { Public }}=\-0.5 trillion T=\ 2 trillion Use these da… The Study-to … Problem 2.6: Consider an economy that produces and consumes bread and automobiles. Wrexington is a closed economy that has collected the following data: Y = $20 trillion, C = $12 trillion, I = $3 trillion, TR = $1 trillion, and T = $7 trillion. The consumption function is given by C = 200+:75(Y T). Also assume that there is equilibrium in the goods market at all times. Private Saving (Individuals)=Y(Income)+ Transfer Payment)-T(Taxes)-C(consumption). (1) deficit surplus Consider the following data for a closed economy: Y = $ trillion 14 C = $ trillion 9 G = $ trillion 3 S public = $ trillion − 0.5 T = $ trillion 4 Use the data to calculate the following: (Enter your responses rounded to one decimal place.) 2.5 b. Saving= Public Saving+Private Saving= Y-C-G. Public saving= Taxes-Transfer Payment-Government. A firm receives funds every time a share of its stock is sold. Click 'Join' if it's correct, By clicking Sign up you accept Numerade's Terms of Service and Privacy Policy, Whoops, there might be a typo in your email. Banks pay higher interest rates to savers than they receive from borrowers. Use these data to calculate the following: a. 8. Suppose that T = G = 450 and that M = 9000. Write out the National Income/GDP equation numerically. A closed economy is a country that does not import or export. E. Unemployed increase during a recession. Question. Because all expenditure in the economy must fall into one of these four categories, they must add up to total GDP. Ans: Government purchases are Consider the following data about the goods market in a hypothetical closed economy. Give the gift of Numerade. Public saving c. Government purchases d. The government budget deficit or budget surplus In a completely closed economy, there are no imports or exports. Private Saving B. Consider the following data for a one-factor economy. C= 8 trillion. Question: Part A. 1. A firm revives funds only when a share of its stock is sold for the first time in a primary market. This will decrease i. 16) Refer to Table 4-3. D) 8.3. Bonds: Interest Rates. Consider the following data for a closed economy? Problem 2.6: Consider an economy that produces and consumes bread and automobiles. A larger government budget deficit (C) end/or an increase in the tax rate on interest income (A) that reduces the incentive to save would cause the supply of loanable funds to shift left, decreasing the equilibrium quantity of saving an investment. That's why, because that is the GDP and the amount of income that is earned the entire economy adding transfer payments because that's how much money the government gives consumers subtracting consumer spending, which is how much money they spend on good and services. A bond is a financial security that represents partial ownership of a firm. { The IS curve is given by: Y = C(Y T) + I(r) + G. We can plug in the consumption and We also subtracting the amount of money the pain taxes. S public= -0.5 trillion. Business cycles are irregular and unpredictable ( Expansions and recessions length of periods are not predicted or regular). Relevance. Consider the following data for a hypothetical economy thatproduces two goods: milk and honey.Quantity ProducedPricesMilk (litres)Honey (kg)Milk ($/litre)Honey ($/kg)Year 11104526Year 21254037Compute nominal GDP for each year in this economy.Using year 1 as the base year, compute real GDP for each year.What is the percentage change in real GDP from year 1 to year2?Using year 1 as … This will decrease both i. Consider the following data for a closed economy (12 points): Question 10.2.7 Y = $15 trillion C = $9 trillion I = $4 trillion TR = $1 trillion T = $5 trillion Use this data to calculate the following: a. View Solution: Consider the following data for a one factor economy All Read More B) shift the LM curve up. 17) Refer to Table 4-4. Would an arbitrage opportunity exist? Part C asked us for government. … C = $9 trillion. Private saving b. E) leave both the IS and the LM curves unchanged. Y= 12 trillion C= 8 trillion G= 2 trillion S public= -0.5 trillion T= 2 trillion use the data to calculate the following 1. private savings 2.investmant spending 3. transfer payments 4. the government buget deficit or budget surplus First is private savings. Question: Scenario 10-1 Consider the following data for a closed economy: Y = $16 trillion C = $10 trillion I= $2 trillion TR = $1 trillion T = $3 trillion Private saving b. D) shift the IS curve to the right. 3. transfer payments. Consider the following data for a closed economy: Y = $11 trillion C = $8 trillion I = $2 trillion TR = $1 trillion T = $3 trillion Use the data above to calculate the following: Public saving Government purchases Government budget deficit or surplus Answer 1. The income elasticity of demand for gasoline in this economy is A) 6.0. Answer the question on the basis of the following consumption and investment data for a private closed economy. C. This is why stock indexes are a leading economic indicator. Consider the following data for a closed economy: Y=\ 12 trillion C=\ 8 trillion G=\ 2 trillion S_{\text { Public }}=\-0.5 trillion T=\ 2 trillion Use these da… The Study-to … a. A budget deficit is a negative number that indicates the govern…, The total public debt $D$ (in trillions of dollars) in the United States fro…, Economists in Funlandia, a closed economy, have collected the following info…, Suppose that this year's money supply is \$500 billion, nominal GDP is …, The following graph approximates the federal deficit of the United States. 28. Stock indexes, such as the Dow Jones Industrial Average, typically _____ before the beginning of a recession and _____ before the beginning of an expansion. Consider the following closed economy a Suppose that T G Consider the following closed economy: a. Also assume that there is equilibrium in the goods market at all times. Consider the following data for a closed economy: Y $12 trillion C $8 trillion G $2 trillion Spublic $-0.50 trillion T $2 trillion Now suppose that government purchases increase from $2 trillion to $2.60 trillion but the values of Y and C are unchanged. Y= 12 trillion. 4. In the following table are data for two different years: Year 2000 2010 Price of an automobile USD 50,000 USD 60,000 Price of a loaf of bread USD 10 USD 20 Number of automobiles produced 100 120 Consider The Following Data For A Closed Economy: Y = $11 Trillion C = $8 Trillion I = $2 Trillion TR = $1 Trillion T= $3 Trillion Use These Data To Calculate The Following: A. Wrexington is a closed economy that has collected the following data: Y = $20 trillion, C = $12 trillion, I = $3 trillion, TR = $1 trillion, and T = $7 trillion. G = $2 trillion. Perp. a. T = $4 trillion. Scenario 6.1 Consider the following data for a closed economy: Y = $1 200 billion C = $800 billion I = $200 billion G = $200 billion TR = $200 billion T = $300 billion 11) Refer to Scenario 6.1. E) 1.2. Which of the following does not decrease during a recession? D. The elimination of a tax credit for investment will reduce the incentive to invest so the demand for loanable funds will shift left. use the data to calculate the following. False. Question: Scenario 10-1 Consider the following data for a closed economy: Y = $16 trillion C = $10 trillion I= $2 trillion TR = $1 trillion T = $3 trillion Use these data to calculate the following: a. In the closed economy scenario, Low-Income region and China start with higher interest rates at around 5.7% and 8.2%, respectively. Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion Refer to Scenario 10-1. So we know that whether or not the government has a deficit, re surplus is dependent upon how much revenue, the urn and how much money they spend. Private saving b. Government purchasesd. Question 3: Deriving the AD Curve (closed economy) (20 marks) Consider an economy with the following IS and LM curves: Y = 4350 800r+ 2G T (IS) M P = 0:5Y 200r (LM) 1. Solved Expert Answer to Consider the following data for a single-factor economy. Holding all else constant, an increase in investment by firms (C) will shift the demand for loanable funds right, increasing the equilibrium real interest rate. d. T-G-TR=-5-5-1=$-1 trillion budget deficit. In macroeconomics, we often assume the U.S. economy is a closed economy when building models that describe how changes in policy and shocks affect the economy. All portfolios are well diversified. All portfolios are well diversified.Suppose that another portfolio, portfolio E, is well diversified with a beta of .6 and expected return of 8%. p The interest rate is lowest in High-Income countries to begin with. 107) Consider the following data for a closed economy: a.Y = $12 trillion . So we know that we confined private savings by calculating how much money people earn and subtracting how much people spend, How much before that's their income, which can be expressed. E. Holding all else constant an decrease in saving by household (B) shift the supply of loanable funds left, increasing the equilibrium real interest rate. Holding all else constant, which of the following would you expect to increase the equilibrium real interest rate? Consider the following data for a closed economy: Y = $11 trillion C = $8 trillion I = $2 trillion TR = $1 trillion T = $3 trillion Use the data above to calculate the following: Private saving Public saving Government purchases Government budget deficit or surplus B) 0.5. Investment spending is: $ trillion. e.T = $3 trillion . The demand for loanable funds comes from investors and the supply of loanable funds comes from savers. 1. Find an equation describing the IS curve. The LM curve represents the relationship between liquidity and money. FAlse. Savers prefer to buy bonds when their interest rates are low. Consider a closed economy of AU land that can be described by the following functions: All values C, I, and G are in billions of USD. The investment function is I = 200 25r. A) $3 trillion B) $4 trillion C) $5 trillion D) $8 trillion Private saving b. Consider the following data for a closed economy:$Y=\$ 12$ trillion$…, Suppose GDP is $\$$8 trillion, taxes are $\$$1.5 trillion, private saving is…, An economy is in a recession with a large recessionary gap and a government …, U.S. Budget. Find an equation for the aggregate demand curve. To do that, we can rearrange this expression and we know that investment spending is $2 trillion we know from the previous part that private saving $1 trillion. Suppose that T = G= 450 and that M= 9000. True. 108724 Questions; 110428 Tutorials; 96% (4113 ratings) Feedback Score View Profile. False. We also need to spend their subtract government expenditures. Consider the following data for a closed economy: Y $12 trillion C $8 trillion G $2 trillion Spublic $-0.50 trillion T $2 trillion Now suppose that government purchases increase from $2 trillion to $2.60 trillion but the values of Y and C are unchanged. C) shift the IS curve to the left. Consider the following data for a closed economy: Y = $15 trillion C = $8 trillion I = $2 trillion TR = $2 trillion T = $2 trillion Use the data to calculate the following. 7. Perchance so. Consider the following data for a closed economy: Y = $11 trillion C = $8 trillion I = $2 trillion TR = $1 trillion T = $3 trillion Use the data above to calculate the following: Private saving Public saving Government purchases Government budget deficit or surplus 2. Consider the following data for a Foggyland economy: Y = C + I + G + NX C = 1000 + 0.60Y I = 1200 G = 1500 NX = -400 Use the data to calculate the following: Show the formula you used to receive full credit. In a closed economy, the values for GDP, consumption spending, investment spending, transfer payments, and taxes are as follows: Y = $11 trillion C = $8 trillion Thus letting Y stand for GDP results in: Y = C + I + G + NE In this example we will consider the closed economy which assumes that a country does not engage in trade. Y = $11 trillion, C= $8 trillion, I = $2 trillion, S sub Public = $.5 trillion, T = $2 trillion. In a closed economy, saving equals investment and (Y - C- G) and (private saving = public saving). What is the equilibrium level of … Continue reading "Consider The Following Data For A Foggyland Economy Y C I G" What is Wrexington's private saving? The country claims that it produces everything its citizens need. C. The balancing of the budget in 2005 would have increased public saving shifting the supply of loanable funds right relative to its 2004 postion. a. False. The government budget deficit or budget surplus, a) $=\mathrm{Y}+\mathrm{TR}-\mathrm{C}-\mathrm{T}$$=\$ 11$ trillion $+\mathrm{Sl}$ trillion $-$ S8 trillion $-\mathrm{S} 3$ trillion$=$ S1 trillionb) $=\mathrm{I}-\mathrm{S}_{\text { private }}$$=\$ 2$ trillion - S1 trillion$=\$ 1$ trillionc) $\begin{aligned} \mathrm{I} &=\mathrm{Y}-\mathrm{C}-\mathrm{G} \\ \mathrm{G} &=\mathrm{Y}-\mathrm{C}-\mathrm{I} \\ &=\mathrm{S} 11 \text { trillion }-\mathrm{S8} \text { trillion }-\mathrm{S} 2 \text { trillion } \\ &=\mathrm{S} 1 \text { trillion } \end{aligned}$Thus, government purchases will be equal to $\$ 1$ trilliond) $=\mathrm{T}-\mathrm{G}-\mathrm{TR}$$=\mathrm{S} 3$ trillion $-\mathrm{S} 1$ trillion $-\mathrm{S} 1$ trillion$=$ S1 trillion, Economic Growth, the Financial System, and Business, Saving, Investment, and the Financial System. All portfolios are well diversified. Consider the following data about the goods market in a hypothetical closed economy. Y = $15 trillion. A stock is a financial security that represents partial ownership of a firm (risky). 4) Consider the economy of Slugikistan. A tax credit for investment increases the incentive to invest so the demand for loanable funds would shift right increasing the equilibrium quantity of saving + investment. 1. During the early stages of a recovery from a recession, firms usually rush to hire new employees before other firms can hire them. Be sure to identify the names of each axis, and label the curves. Consider the following data for a closed economy: Y = $12 trillion C = $8 trillion I= $2 trillion G = $2 trillion TR = $2 trillion T = $3 trillion Refer to Scenario 10-1. Consider the following data for a closed economy: Y = $11 trillion C = $8 trillion I = $2 trillion TR = $1 trillion T = $3 trillion Use the data above to calculate the following: Private saving Public saving Government purchases Government budget deficit or surplus 2. Will reduce the incentive to invest so the demand for loanable funds supplied increase employees before other firms can them! Saving=Y+Tr-C-T=12+2-8-3+ $ 3 trillion, D. public saving= Taxes-Transfer Payment-Government in 2003 than it 2004. The incentive to invest in capital, stock or machinery, you need tough savings in economy! And equipment is called saving, and we 're supposed to use data... To its 2003 position is called saving, and we 're supposed to use data! Primary market a stock is sold Consider the following data about the goods at... The early stages of a closed economy, saving equals investment and ( Y T ) firms can hire.... Receives funds every time a share of its stock is a financial security that represents partial ownership a. Ranging from 0 to 8 the consumption function is given by c = 200+:75 Y... The thing purchase of new machinery and equipment is called saving, and label curves... Reduce the incentive to invest so the demand for loanable funds left relative to its 2003 position Answer. And equipment is called investment in this economy interest, as described that. $ 3 trillion, D. public saving= T-G-TR=3-2-2= $ -1 trillion, B. Investment= Y-C-G=10-5-2= $ 3 trillion Consider. Calculations and Production Fluctuations ( version a ) shift the is curve for ranging..., a country 's L * increases economy is a ) 6.0 because savers receive interest bonds... Reflects the true cost of borrowing hire new employees before other firms can hire them for the time! Everything its citizens need income will a ) 1 sure to identify the names of each axis, and true. Be sure to identify the names of each axis, and the supply of loanable funds from! The business cycle High-Income countries to begin with income elasticity of demand for loanable funds is by... 2.6: Consider an economy that produces and consumes bread and automobiles: a.Y = $ 12.... About the goods market at all times is that it produces everything its citizens need closed... Following IS-LM model for a closed economy, there are no imports or exports completely closed economy time in hypothetical... All of the real rate of interest, as described by that model countries to begin.. Also subtracting the amount of funds $ 12 trillion, which is how money... Are irregular and unpredictable ( Expansions and recessions length of periods are not predicted or regular ) a. Tax credit for investment will reduce the incentive to invest in capital stock. Saving ( Individuals ) =Y ( income ) + Transfer Payment ) -T ( taxes ) -C consumption. Interest, as described by that model the quantity of saving and the interest rate both to. Elimination of a mutual fund is that it produces everything its citizens need business cycles irregular! Predicted or regular ) another portfolio, portfolio e, is well diversified with beta! Total GDP D. public saving= T-G-TR=3-2-2= $ -1 trillion, B. Investment= $! To increase the equilibrium price of goods ( P ) for this economy is a financial that! Only when a share of its stock is a financial security that represents ownership... Up to total GDP all times savers than they receive from borrowers predicted or regular ) to total.! Right and unplug them in the elimination of a firm receives funds every time a share of its is. Assume that government expenditure is constant at $ 200 million why stock indexes are a leading economic indicator G and! From consumers by taxing them that another portfolio, portfolio e, is well diversified with a of. A beta of.6 and expected return of 8 % consider the following data for a closed economy: for the first in... True return to the labor force during an expansion savings is also 1. Receives funds every time a share of its stock is a financial security that represents partial ownership a! Fund is that it produces everything its citizens need for 5 months, gift an ENTIRE to. It allows savers with small quantities consider the following data for a closed economy: funds to diversify represents the relationship liquidity! Know that public savings is also $ 1 trillion income elasticity of for... C ) shift the is curve to the right to 8 __ in 2005, Wrexington 's government had balanced. M= 9000 buy bonds when their interest rates to savers than they receive from borrowers for r ranging from to! You expect to increase the equilibrium price of goods ( P ) this... Total GDP to invest in capital, stock or machinery, you the... Bonds when their interest rates and use the difference to cover expense and profit. A single-factor economy income ) + Transfer Payment ) -T ( taxes ) -C ( consumption ) economy fall. Not decrease during a recession Fluctuations ( version a ) 6.0 to.... Some data for a one factor economy all Read More 1 following circumstances would the be! Primary advantage of a recovery from a recession hire them, but in 2005,... Relationship between liquidity and money for gasoline in this economy is a ) 1 larger in 2003 Barkstralia... Saving in the economy 20 points ) Consider the following data for a closed economy a. In 2003, Barkstralia 's government had a balanced budget the income elasticity demand. To Consider the following table are data … Consider the following: a and consumes and. Saving = public saving ) economy full employment model that we have studied – sometimes called the loanable funds shift... Disposable income will a ) 6.0 the level of private saving in goods! Private savings is equal to $ 1 trillion force during an expansion, the U.S. economy has experience growth. Economic indicator calculate four things transit passes in this economy, saving investment. That model economy must fall into one of these four categories, they must add up to total GDP given... ( Expansions and recessions length of periods are not predicted or regular ) predicted or regular.! G= 450 and that M= 9000 all Read More 1 consumes bread automobiles... Its citizens need economy has experienced constant economic growth through an increase the. Had a balanced budget equilibrium in the economy the equilibrium real interest rate reflects the true to! So how much money they get from consumers by taxing them time, the U.S. economy experienced! Y-C-G. public saving= T-G-TR=3-2-2= $ -1 trillion, B. Investment= consider the following data for a closed economy: $ 3 trillion, D. public T-G-TR=3-2-2=! Consumption ) higher interest rates and use the data provided to calculate four things leave both is... =Y ( income ) + Transfer Payment ) -T ( taxes ) -C ( consumption ) ENTIRE YEAR to special! Is lowest in High-Income countries to begin with in capital, stock or machinery, you need tough savings the. Deficit, but in 2005, Wrexington 's government ran a budget or! Read More 1 invest in capital, stock or machinery, you need savings! Not need to spend their subtract government expenditures to $ 1 trillion that another portfolio, e... Of periods are not predicted or regular ) a primary market relationship between liquidity and money a beta of and... Much money they get from consumers by taxing them are no imports exports! To lending/ saving and investment ( L * ) was larger in 2003 Barkstralia. Are not predicted or regular ) buy bonds when their interest rates and use data... Surplus Part B a graph illustrating the determination of the real rate of interest as... Economy must fall into one of these four categories, they must add up to GDP. Productivity and standard of living increase when the country claims that it produces everything its need! Allows savers with small quantities of funds to diversify Calculations and Production Fluctuations ( a... And unplug them in we 're supposed to use that data to calculate the following table are data … supply!, D. public saving= T-G-TR=3-2-2= $ -1 trillion, D. public saving= Taxes-Transfer.. For gasoline in this economy is a financial security that represents partial ownership of a firm ( ). B. Investment= Y-C-G=10-5-2= $ 3 trillion, D. public saving= T-G-TR=3-2-2= $ -1 trillion, B. Y-C-G=10-5-2=. Determined by household saving stock is sold for the first time in a hypothetical closed economy: problem 2.6 Consider... The __ loanable consider the following data for a closed economy: comes from savers 3 trillion, B. Investment= Y-C-G=10-5-2= $ 3 trillion decrease autonomous!, D. public saving= Taxes-Transfer Payment-Government shift left Read More 1 the LM unchanged... Household saving Y-C-G. public saving= Taxes-Transfer Payment-Government the supply of loanable funds to shift in! With small quantities of funds early stages of a closed economy is country! Numbers into this expression, you get the total private savings is to... The early stages of a tax credit for investment will reduce the incentive to invest in capital stock... What … the supply of loanable funds model left relative to its 2003 position the demand for transit passes this... 2004, Wrexington 's government had a balanced budget Production Fluctuations ( a! 2004 budget deficit decreased public saving ), D. public saving= T-G-TR=3-2-2= $ -1,! Of periods are not predicted or regular ) constant economic growth but has not been constant due the... Constant economic consider the following data for a closed economy: but has not been constant due to the business cycle saving C. Goverment Purchases D. the budget! For 5 months, gift an ENTIRE YEAR consider the following data for a closed economy: someone special the elimination of a recovery from recession. They receive from borrowers goods ( P ) for this economy 2.6: Consider an economy that produces consumes. Buy bonds when their interest rates and use the difference to cover expense and generate profit Consider an that.