2. Suppose GDP is S600 billion taxes are S100 billion private saving is S50 billion, public...

Question

Question

2. Suppose GDP is S600 billion taxes are S100 billion private saving is S50 billion, public saving is $20 billion, assuming t

business economics

Answer 1

Answer #1

In a closed economy,

GDP= C+I+G, from the values above $600 billion = C+I+G

National savings are denoted by the sum of private and public savings, which in a closed economy is also equal to Investments.

Thus, National Savings = $50 billion + $20 billion = $70 billion.

Therefore, I is also equal to $70 billion.

Next, Public savings are simply the savings of the government, after paying expenditure and earning taxes.

Thus Public Savings = T-G

Putting values from above, $20 billion = $100 billion - G

Thus, G= $80 billion.

Putting values of I and G in the GDP equation to find C,

$600 billion = $70 billion + $ 80 billion + C

Thus, C= $450 billion.

Answer 2

Similar Homework Help Questions

Suppose that GDP is $8 billion, taxes are $1.5 billion, private saving is $0.5 billion, and...

Suppose that GDP is $8 billion, taxes are $1.5 billion, private saving is $0.5 billion, and public saving is 0.2 billion. Assuming the economy is closed, calculate the size of: - Disposal income - Consumption - Investment - Government Spending - National Savings
2. Suppose GDP of a closed economy is $10 billion, consumption is $7 billion, private saving...

2. Suppose GDP of a closed economy is $10 billion, consumption is $7 billion, private saving is $1 billion and public saving is $0.2 billion. Calculate taxes, government purchases, national saving and investment.
1. 2006 the adult population was about 15 million the labor force population was 65% and...

1. 2006 the adult population was about 15 million the labor force population was 65% and the unemployment rate was 6%. What was the no. g people employed and no of people unemployed? 2. Suppose GDP is S600 billion taxes are $100 billion private saving is S50 billion, public saving is $20 billion, assuming that this economy is closed. Calculate consumption government purchase, national saving and investment?

4 Suppose GDP is $8 trillion, taxes are $1.5 trillion, private saving is $0.5 trillion, and...

4 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.
7. If at some interest rate desired investment is $400 billion, desired private saving is $600...

7. If at some interest rate desired investment is $400 billion, desired private saving is $600 billion, and the budget deficit is $300 billion, is there a surplus or a shortage in the market for loanable funds? What does this imply would happen to interest rates? 8. In a closed economy, GDP is $1000, government purchases are $200, and consumption is $700. If the government has a budget surplus of $25, what are investment, taxes, private saving, public saving and...
4. GDP 20 Consumption 13 Taxes-8 Transfer Pmts=4 Public Saving= -2 A) Calculate Private Saving, Government Spending...

4. GDP 20 Consumption 13 Taxes-8 Transfer Pmts=4 Public Saving= -2 A) Calculate Private Saving, Government Spending, Investment and National Saving B) Is the Govt budget currently in surplus, deficit or balanced? C) Explain the role of Savings/Investment to long run growth. D) How is the Govt budget impacting the level of Investment?

A closed economy has income of $1,200 billion, government spending of $220 billion, taxes of $170...

A closed economy has income of $1,200 billion, government spending of $220 billion, taxes of $170 billion, and investment spending of $250 billion. Consumption spending is $ billion. Private saving is $ billion. Public saving is $ billion. National saving is $ billion. Enter whole numbers.
Suppose that in a closed economy GDP is equal to $11,000, net taxes are equal to...

Suppose that in a closed economy GDP is equal to $11,000, net taxes are equal to $2,500, consumption equals $7,500 and government purchases equal $2,000. What are private saving, public saving, and national saving? $1,500, $1,000, and $500, respectively $1,000, $500, and $1,500, respectively $500, $1,500, and $1,000, respectively None of the above is correct.
3. Problems and Applications Q4

Suppose GDP is $9 trillion, taxes are $1.9 trillion, private saving is $0.6 trillion, and public saving is $0.3 trillion.Assuming the economy is closed, complete the following table by calculating consumption, government purchases, national saving, and investment.ComponentAmount(Trillions of dollars)ConsumptionGovernment PurchasesNational SavingInvestment

In a closed economy, private saving is smaller than investment if government spending exceeds tax revenue....

In a closed economy, private saving is smaller than investment if government spending exceeds tax revenue. Select one: True False If there is a surplus of loanable funds, then neither curve shifts, but the quantity of loanable funds supplied increases and the quantity demanded decreases as the interest rate rises to equilibrium. Select one: True False An increase in the budget deficit would cause a shortage of loanable funds at the original interest rate, which would lead to falling interest...