Suppose a closed economy had public saving of −$1 trillion and private saving of $17 trillion. What are national saving and investment for this country?
A)$16 trillion, $16 trillion
B)$16 trillion, $18 trillion
C)$18 trillion, $16 trillion
D)$18 trillion, $18 trillion

Question

Quizplus · Accepted Answer

National saving is the sum of public saving and private saving, which equals $16 trillion ($17 trillion - $1 trillion). In a closed economy, national saving equals investment, so investment is also $16 trillion.

Suppose a Closed Economy Had Public Saving of −$1 Trillion