1. Explain the difference between saving and investment as defined by a macro economist. Which of the following situations represent investment? Saving? Explain.
a. Your family takes out a mortgage and buys a new house.
b. You use your $200 paycheck to buy stock in AT&T.
c. Your roommate earns $100 and deposits it in her account at a bank.
d. You borrow $1,000 fr om a bank to buy a car to use in your pizza delivery business.
2. Suppose GDP is $8 trillion, taxes are $1.5 trillion, private saving is $0.5 trillion, and public saving is $0.2 trillion. Assuming this economy is closed, calculate consumption, government purchases, national saving, and investment.