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15 June, 11:02

DP is $12 trillion this year in a closed economy. Consumption is $8 trillion and government spending is $2 trillion. Taxes are $0.5 trillion. How much is investment spending? $3.5 trillion $3 trillion $2.5 trillion $2 trillion

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  1. 15 June, 13:58
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    The investment spending is $2 trillion, the last option given in the question.

    Explanation:

    The formula for GDP for a closed economy is given below:

    GDP=C+I+G

    where C is the consumption expenditure of the households given as $8 trillion

    I is the investment spending in the economy which is unknown

    G is government expenditure given as $2 trillion

    12 trillion=$8 trillion+I+$2 trillion

    12 trillion=10 trillion+I

    I=$12 trillion-$10 trillion

    I = $2 trillion

    The correct answer is $2 trillion, the last option
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Home » Business » DP is $12 trillion this year in a closed economy. Consumption is $8 trillion and government spending is $2 trillion. Taxes are $0.5 trillion. How much is investment spending? $3.5 trillion $3 trillion $2.5 trillion $2 trillion
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