Question

5. Graph the following and the effects of the following on national saving, investment, and the real interest rate. Explain your reasoning:

a. Millennials need avocado toast today and society become less future-oriented and thus decide to save less.

b. The government announces a large, one-time bonus payment to veterans returning from a war. The bonus will be financed by additional taxes levied on the general population over the next five years.

c. AOC’s green plan passes and the expected future marginal product of capital that rely of fossil fuels decreases. It also causes an decrease in expected future income

Answer 1