Question

We have the following data for a hypothetical open​ economy: GNP​ = ​$14 comma 00014,000 Consumption​ (C) = ​$7 comma 5007,500 Investment​ (I) = ​$1 comma 0001,000 Government Purchases​ (G) = ​$1 comma 2001,200 Tax Collections​ (T) = ​$1 comma 2001,200 What is the value of private savings plus public​ savings? ​$nothing ​(Enter your answer as an integer. Include a minus sign if necessary.​

Answer 1

Answer: $5,300

Explanation:

Private Saving refers to money that households did not consume nor pay as taxes so the formula is;

= Output - Consumption - Taxes

= 14,000 - 7,500 - 1,200

= $5,300

Public Saving refers to money that the government got as revenue but did not spend so the formula is;

= Taxes - Government Spending

= 1,200 - 1,200

= $0

Total Saving (Private + Public Saving)

= 5,300 + 0

= $5,300