Suppose that in a closed economy GDP is equal to $35,000, consumption equal to $16,000, government purchases equal $4,500, and taxes equal $8,000. What are private saving, public saving, and national saving?
A)$3,500, $11,000, and $14,500, respectively
B)$19,000, $27,000, and $12,500, respectively
C)$11,000, $3,500, and $14,500, respectively
D)$27,000, $19,000, and $12,500, respectively

Question

Quizplus · Accepted Answer

Private saving is calculated as income minus taxes minus consumption, which is $35,000 - $8,000 - $16,000 = $11,000. Public saving is government revenue minus government spending, which is $8,000 - $4,500 = $3,500. National saving is the sum of private and public saving, which is $11,000 + $3,500 = $14,500.

Suppose That in a Closed Economy GDP Is Equal to $35,000