Suppose that in a closed economy GDP is 10,000, consumption is 6500, and taxes are 2000. What value of government expenditures would make national saving equal 1000?

Question

Quizplus · Accepted Answer

National saving is calculated as GDP - Consumption - Government Expenditures. Given that national saving is 1000, GDP is 10,000, and consumption is 6500, the equation becomes 10,000 - 6500 - Government Expenditures = 1000. Solving for Government Expenditures gives 2500.

Suppose That in a Closed Economy GDP Is 10,000, Consumption