Ask Question
15 August, 21:52

Suppose GDP equals $10 trillion, consumption equals $6.5 trillion, the government spends $2 trillion and has a budget deficit of $300 billion. Assume a closed economy. Find the private saving and the investment spending.]

+3
Answers (1)
  1. 15 August, 21:57
    0
    Private saving : 1.8

    The investment spending: 1.5

    Explanation:

    Given:

    GDP (Y) = $10 trillion Consumption (C) = $6.5 trillion Government spends (G) = $2 trillion Budget deficit (G - Tax) = f $300 billion = 0.3

    We have public saving: G - Tax = 0.3 trillion

    Tax = G - 0.3 = 2 - 0.3 = 0.7 trillion

    Private saving = Y - T - C = 10 - 1.7 - 6.5 = 1.8 trillion

    National saving = Y - C - G = 10 - 6.5 = 2 = 1.5 trillion

    Investment = national saving = 1.5 trillion
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Suppose GDP equals $10 trillion, consumption equals $6.5 trillion, the government spends $2 trillion and has a budget deficit of $300 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers