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Nata [24]
3 years ago
10

"The country of bienmundo does not trade with any other country. its gdp is $30 billion. its government purchases $5 billion wor

th of goods and services each year and collects $6 billion in taxes. private saving in bienmundo amounts to $5 billion. what are consumption and investment in bienmundo?"
Business
1 answer:
baherus [9]3 years ago
4 0

Answer:

Consumption in Bienmundo =$19bn

Investment in Bienmundo =$6bn

Explanation:

Formula for calculating private savings is ;

1. Private savings = GDP - Tax - Consumption

$5bn = $30bn - $6bn - Consumption

Consumption = $30bn - $6bn -$5bn

Consumption = $19bn

We will also use the formula for calculating GDP without export and import because Bienmundo does not trade with any other country

2. GDP = Consumption + Government expenditure + Investments

$30bn=$19bn + $5bn + Investment

Investments = $30bn -19bn - $5bn

Investments = $6bn

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