Question

We have the following data for a hypothetical open​ economy: GNP​ = ​$9,0009,000 Consumption​ (C) = ​$7,5007,500 Investment​ (I) = ​$1,4001,400 Government Purchases​ (G) = ​$1,6001,600 Tax Collections​ (T) = ​$1,200what is the value of total savings S?what is the value of current account balance CA?

Answer 1

Answer:

-$100 and -$1,500

Explanation:

The computation is shown below:

As we know that

Total saving = Private saving + public saving

where,

Private saving is

= Y - T - C

= $9,000 - $1,200 - $7,500

= $300

And, public saving is

= T - G

= $1,200 - $1,600

= -$400

So, the total saving is

= $300 - $400

= -$100

And, the value of current account balance is

= GNP - C - I - G

= $9,000 - $7,500 - $1,400 - $1,600

= -$1,500