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18 December, 11:51

Scenario 22-2: Open Economy S = I In an open economy suppose that GDP is $12 trillion. Consumption is $8 trillion and government spending is $2 trillion. Taxes are $0.5 trillion. Exports are $1 trillion and imports are $3 trillion. Use Scenario 22-2. How much is national saving?

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  1. 18 December, 15:09
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    GDP = C+I+G+X-M

    12=8+I+2+1-3

    12=I+8

    I=12-8

    I=4

    Because S=I

    National savings = $4 Trillion
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