Question

In the nation of Ruva, GDP is $15 trillion, consumption is $10 trillion, and government spending is $2.5 trillion. Taxes are $1 trillion, and the net capital inflow is $0.5 trillion. Private savings in Ruva equal $_____ trillion.

Answer 1

Answer:

Private Savings = $4 Trillion

Explanation:

Given that

GDP = Y = 15 Trillion

Taxes = T = 1 trillion

Consumption = C = 10 trillion

Recall that

Private Savings = Y - T - C

Therefore,

Private savings = 15 - 1 - 10

= $ 4 Trillion