Suppose that in a closed economy GDP is equal to 22,000, taxes are equal to 7000, consumption is equal to 13,000, and government expenditures are equal to 4000. What is private saving?
A) 0
B) 1000
C) 2000
D) 3000

Question

Quizplus · Accepted Answer

Private saving is calculated as GDP minus consumption minus taxes. Thus, private saving equals 22,000 - 13,000 - 7,000 = 2,000. Therefore, the correct choice is C.

Suppose That in a Closed Economy GDP Is Equal to 22,000