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30 July, 17:19

We have the following data for a hypothetical open economy: GNP = $9,0009,000 Consumption (C) = $7,5007,500 Investment (I) = $1,4001,400 Government Purchases (G) = $1,6001,600 Tax Collections (T) = $1,200what is the value of total savings S? what is the value of current account balance CA?

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  1. 30 July, 18:54
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    -$100 and - $1,500

    Explanation:

    The computation is shown below:

    As we know that

    Total saving = Private saving + public saving

    where,

    Private saving is

    = Y - T - C

    = $9,000 - $1,200 - $7,500

    = $300

    And, public saving is

    = T - G

    = $1,200 - $1,600

    = - $400

    So, the total saving is

    = $300 - $400

    = - $100

    And, the value of current account balance is

    = GNP - C - I - G

    = $9,000 - $7,500 - $1,400 - $1,600

    = - $1,500
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