$$\begin{array} { | l | l | }
\hline \text { Item } & \begin{array} { l }
\text { Billions of } \
\text { dollars }
\end{array} \
\hline \text { Exp orts of goods and services, } X & \
\hline \text { Imports of goods and services, } M & 1,000 \
\hline \text { Net taxes, } T & \
\hline \text { Government exp enditure, } G & 1,300 \
\hline \text { Saving, } S & \
\hline \text { Investment, } I & 650 \
\hline
\end{array}$$
-Using the data in the above table, if net exports = -$500 billion and the government balances its budget,

Question

$$\begin{array} { | l | l | } 
\hline \text { Item } & \begin{array} { l } 
\text { Billions of } \
\text { dollars }
\end{array} \
\hline \text { Exp orts of goods and services, } X & \
\hline \text { Imports of goods and services, } M & 1,000 \
\hline \text { Net taxes, } T & \
\hline \text { Government exp enditure, } G & 1,300 \
\hline \text { Saving, } S & \
\hline \text { Investment, } I & 650 \
\hline
\end{array}$$
-Using the data in the above table, if net exports = -$500 billion and the government balances its budget,

Quizplus · Accepted Answer

Net exports (X - M) is given as -$500 billion, meaning exports (X) are $500 billion less than imports (M), which are $1,000 billion. Therefore, X = $500 billion. The government balances its budget, so T = G = $1,300 billion. Using the equation (S - I) = (G - T) + (X - M), we find (S - 650) = (1300 - 1300) + (-500), so S = 150 billion.

-Using the Data in the Above Table, If Net Exports