Suppose that there is no trade and no government in a small economy. GDP is $25 trillion, and consumption spending is $18 trillion this year. There is a new government, and it imposes taxes on its citizens to spend on infrastructure. Taxes and government spending are both $2 trillion. What is the level of private saving now?
A) $11 trillion
B) $7 trillion
C) $5 trillion
D) $18 trillion
Correct Answer:
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Q44: Taxes equal:
A) government spending plus private savings.
B)
Q45: If a country has a trade surplus,
Q46: In an open economy, government spending was
Q47: Capital inflow into a country is associated
Q48: Use the following to answer questions:
Q50: Use the following to answer questions:
Q51: Suppose that there is no trade and
Q52: National savings equals:
A) private savings plus consumption
Q53: In an open economy, savings CANNOT come
Q54: Suppose that there is no trade and
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