GDP= 100,000, taxes = 22,000, government purchases = 25,000 and national savings =15,000. For this economy , consumption amounts to
a) 38,000
b) 60,000
c) 68,000
d) 53,000
Answer
the economy is closed as there is no import or export so the equation of GDP is:
GDP=C+I+G
where
S=saving=I=investment
G=25000
I=15000
GDP=100000
Consumption =GDP-G-I
=100000-25000-15000
=$60000
the consumption is $60000
option b
GDP= 100,000, taxes = 22,000, government purchases = 25,000 and national savings =15,000. For this economy...