Assume that a government increases its spending by $200 billion [∆G=200] while keeping its net taxes unchanged. Assume that consumption and private savings are unaffected by interest rate and thatthe marginal propensity to consume (mpc) is equal to 0.7.
question
a) what is the public savings?
i know the equation is public saving = T - G but i do not know how to apply the given info to calculate
b) what is the private saving equal to?
i know the equation is private saving = (Y-T)-C but i do not know how to apply the given info to calculate
c) what is the change in national savings?