If GDP = r₁ 000, consumption = R600, taxes = r₁00, and government purchases = R200, how much is saving and investment?
A)saving = R300, investment = R300
B)saving = R200, investment = r₁00
C)saving = r₁00, investment = R200
D)saving = r₀, investment = r₀
E)saving = R200, investment = R200

Question

Quizplus · Accepted Answer

Saving is calculated as GDP - Consumption - Taxes, which is r₁000 - R600 - r₁00 = R300. Investment is equal to saving in a closed economy, but given government purchases of R200, investment is R200.

If GDP = R₁ 000, Consumption = R600, Taxes =