Using data from the St. Louis Federal Reserve
(FRED) (http://research.stlouisfed.org/fred2/),
analyze savings and investment.
a. Find the most recent value and the value
from the same quarter four years earlier
from FRED for Gross Government Saving
(GGSAVE).
b. Total gross saving in the economy is composed
of gross private saving and gross government
saving. What does gross government
saving represent?
c. Using the values found above, explain whether
the government budget is balanced, in a surplus,
or in a deficit. From the first period to
the most recent period, has government saving
increased, decreased, or remained constant?
d. Draw a graph to show the loanable funds
market in equilibrium. Show the effect on
the loanable funds market from the change
in gross government saving you calculated in
part (a). Explain what will happen to the level
of investment in the economy.