Question

In 2015, government spending was $3.80 trillion, tax revenue was $4.50 trillion, GDP was $14.12 trillion, and total consumer spending was $10.50 trillion. Instructions: Round your answers to two decimal places and include a negative sign if necessary. a. If the economy has no exports or imports, what was the national savings in 2015? b. How much was public savings? c. How much was private savings?

Answer 1

Answer:

$-0.18 trillion

$0.7 trillion

$-0.88 trillion

Explanation:

National savings is the sum of public and private savings.

National Saving = private saving + pubic saving = GDP - Consumption - Government Spending

National savings (in trillion)= $14.12 - $10.50 - $3.80 = $-0.18 trillion

Public savings = Taxes - Government Spending

Pubic savings (in trillions) = $4.5 - $3.8 = $0.7 trillion

Private savings in a closed economy = GDP + Transfer payment - Taxes - Consumption

Private savings (in trillions) = $14.12 - $10.50 - $4.50 = $-0.88 trillion

I hope my answer helps you.