For a closed economy, GDP is $37 trillion, consumption is $10 trillion, taxes are $2.0 trillion and the government runs a surplus of $3 trillion. What are private saving and national saving?

Question

Quizplus · Accepted Answer

Private saving is calculated as income minus taxes minus consumption. In a closed economy, income is equal to GDP. Therefore, private saving = $37 trillion (GDP) - $2 trillion (taxes) - $10 trillion (consumption) = $25 trillion. National saving is the sum of private saving and the government surplus. Therefore, national saving = $25 trillion (private saving) + $3 trillion (government surplus) = $28 trillion.

For a Closed Economy, GDP Is $37 Trillion, Consumption Is