-Use the information in the table above to calculate the value of private saving.
A) $25 million
B) $40 million
C) - $15 million
D) $20 million

Question

-Use the information in the table above to calculate the value of private saving.
A) $25 million 
B) $40 million 
C) - $15 million 
D) $20 million

Quizplus · Accepted Answer

Private saving is equal to disposable income minus consumption. Disposable income is equal to national income minus taxes. Consumption is equal to government spending plus investment. Therefore, private saving is equal to national income minus taxes minus government spending minus investment. From the table, we can see that national income is $100 million, taxes are $20 million, government spending is $35 million, and investment is $25 million. Therefore, private saving is equal to $100 million - $20 million - $35 million - $25 million = $20 million.

-Use the Information in the Table Above to Calculate the Value