Suppose the economy is closed with national saving of $2 trillion,consumption of $7 trillion,and government purchases of $1 trillion.What is GDP?

Question

Quizplus · Accepted Answer

In a closed economy, GDP (Y) is calculated as Y = C + I + G, where C is consumption, I is investment, and G is government purchases. National saving (S) is equal to investment (I) in a closed economy, so S = I. Given S = $2 trillion, C = $7 trillion, and G = $1 trillion, GDP = C + I + G = $7 trillion + $2 trillion + $1 trillion = $10 trillion.

Suppose the Economy Is Closed with National Saving of $2