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Alekssandra [29.7K]
3 years ago
8

The following table contains data for a hypothetical closed economy that uses the dollar as its currency.

Business
1 answer:
zhuklara [117]3 years ago
3 0

Answer and Explanation:

The computation is shown below:

Here Y denotes GDP

C Denotes the consumption

I denotes the investment

G denotes the government purchase

GDP for Closed economy:

Y = C + I + G

800 = C + 300 + 200

C = 800 - 500 = 300

Consumption (C) = $300 million

National savings = Y - C - G

= 800 - 300 - 200

= $300 million

Private savings = Y -  C - T

 = 800 - 300 - 260

= $240 million  

Public savings = T - G

= 260 - 200

= $60 million

Based on the above calculations, the government is running a budget Surplus as theT is more than G

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