Answer:
$270 million; $220 million; $50 million
Explanation:
Given that,
GDP = $ 1260.00 million
T = $ 320.00 million
C = $ 720.00 million
G = $ 270.00
Formula for calculating GDP by expenditure method is as follows:
GDP = Consumption + Investment spending + Government spending
$1,260 = $720 + Investment spending + $270
$1,260 = $990 + Investment spending
$1,260 - $990 = Investment spending
$270 million = Investment spending
Private savings refers to the savings of the households. It is calculated by subtracting the taxes and consumption spending from the income level.
Private savings:
= GDP - Taxes - Consumption spending
= $1,260 - $320 - $720
= $220 million
Public savings refers to the savings done by the government. Public savings is calculated by subtracting the government expenditure from the taxes.
Public savings = Taxes - Government spending
= $320 - $270
= $50 million
Therefore, a positive public savings indicates that there is a budget surplus.
