In a small, closed economy, national income (gdp) is $500 million for the current quarter. individuals have spent $300 million on the consumption of goods and services. they have paid a total of $200 million in taxes and the government has spent $150 million on goods and services this quarter. use this information and the national income identity to answer the questions. how much does the economy spend on investment? i= million dollars what is national saving in the economy? s= million dollars how are investment and national saving related in an economy like this? investment and national saving are unrelated. investment is a component of national saving. national saving is always less than investment. national saving equals investment.

Rate of return douglas keel, a financial analyst for orange industries, wishes to estimate the rate of return for two similar-risk investments, x and y. douglas's research indicates that the immediate past returns will serve as reasonable estimates of future returns. a year earlier, investment x had a market value of $27 comma 000; and investment y had a market value of $46 comma 000. during the year, investment x generated cash flow of $2 comma 025 and investment y generated cash flow of $ 6 comma 770. the current market values of investments x and y are $28 comma 582 and $46 comma 000, respectively. a. calculate the expected rate of return on investments x and y using the most recent year's data. b. assuming that the two investments are equally risky, which one should douglas recommend? why?