Suppose that in a closed economy GDP is equal to 11,000, taxes are equal to 2,500 consumption equals 7,500 and government purchases equal 2,000. What are private saving, public saving, and national saving?
A)1,500, 1,000, and 500, respectively
B)1,000, 500, and 1,500, respectively
C)500, 1,500, and 1,000, respectively
D)None of the above is correct.

Question

Quizplus · Accepted Answer

Private saving is GDP - Taxes - Consumption = 11,000 - 2,500 - 7,500 = 1,000. Public saving is Taxes - Government Purchases = 2,500 - 2,000 = 500. National saving is Private saving + Public saving = 1,000 + 500 = 1,500.

Suppose That in a Closed Economy GDP Is Equal to 11,000