The following information is for a private closed economy,where I g is gross investment,S is saving,and Y is gross domestic product (GDP).
I g = 80
S = -80 + .4Y
-Refer to the above information.In equilibrium,saving will be:
A) $40
B) $120
C) $60
D) $80

Question

Quizplus · Accepted Answer

In equilibrium, gross investment (IS) is equal to saving (S), so 80 = -80 + .4Y. Solving for Y, we get Y = $400. Substituting Y into the equation for S, we get S = -80 + .4(400) = $80. Therefore, the correct answer is D, $80.

The Following Information Is for a Private Closed Economy,where Ig

The Following Information Is for a Private Closed Economy,where I_g