Consider a closed economy without a government.If the saving rate in the economy is 20 percent and the aggregate saving is $10,000,the aggregate consumption in the economy is ________.

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In a closed economy without a government, the aggregate saving is a portion of the total income that is not consumed. If the saving rate is 20 percent (or 0.20), this means that 80 percent (or 0.80) of the total income is consumed. Given that the aggregate saving is $10,000, which represents 20 percent of the total income, the total income can be calculated as $10,000 / 0.20 = $50,000. Therefore, the aggregate consumption, which is 80 percent of the total income, is $50,000 * 0.80 = $40,000. However, based on the options provided and the calculation intended, it seems there was a mistake in my explanation regarding the final step of calculation. The correct approach should be: if the saving is $10,000 and this represents 20% of the total income, the total income is indeed $50,000. Since saving is part of the total income and the rest is consumed, if the saving rate is 20%, then $10,000 is the saving part, and the consumption would be the total income minus savings. However, the correct interpretation of the given options and the calculation mistake points towards a misunderstanding in the explanation rather than the calculation of consumption directly from the options provided. The correct approach to find the aggregate consumption directly was not clearly outlined in relation to the options given.

Consider a Closed Economy Without a Government