Ask Question
BusinessBusiness
10 September, 15:22

Scenario: Open Economy S = I In an open economy GDP is $12 trillion this year. Consumption is $8 trillion, and government spending is $2 trillion. Taxes are $0.5 trillion. Exports are $1 trillion, and imports are $3 trillion. Look at the scenario Open Economy S = I. How much is investment spending? a. $3 trillion b. $2 trillion c. $3.5 trillion d. $4 trillion

+5
Answers (1)
  1. 10 September, 17:59
    0
    D. $4 trillion

    Explanation:

    Given that

    GDP = 12 trillion

    C = 8 trillion

    G = 2 trillion

    T = 0.5 trillion

    X = 1 trillion

    M = 3 trillion

    Recall that

    I = national savings + (M - X)

    And national savings = GDP - C - G

    Thus

    National savings = 12 - 8 - 2

    = 2 trillion

    Thus,

    I = 2 + (3 - 1)

    I = 2 + 2

    I = 4 trillion.

    Therefore, investment spending is $4 trillion
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Scenario: Open Economy S = I In an open economy GDP is $12 trillion this year. Consumption is $8 trillion, and government spending is $2 ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Which of the following is an example of competing on quick response? A) A firm produces its product with less raw material waste than its competitors. B) A firm offers more reliable products than its competitors.
Answers (1)
Which scenario does this graph illustrate? Companies need to maximize production, so they will produce less and charge more. Companies want to make money, so they increase production as price increases.
Answers (1)
Which of the following terms refers to an ongoing process of making decisions that guides the firm both in the short term and for the long term? A. Marketing planning B. Functional planning C. Business planning D. Strategic planning E.
Answers (1)
Because interest rates have fallen, a company retires bonds which had been issued at their face value of $240,000. The company bought the bonds back at 96.00. The journal entry to record this retirement includes a debit of:
Answers (1)
Cbs company invested in a project that is expected to have an annual cash flow of $10,000. the project's life is five years and has an irr of 14 percent. how much was the initial investment in the project?
Answers (1)
New Questions in Business
A city acquires a 10-foot strip of a property owner's land for a public walking trail. the owner's home is not affected and she is able to use the land. is the homeowner eligible for compensation?
Answers (1)
A company uses the newsvendor model to manage its inventories and faces normally distributed demand with a coefficient of variation of 0.75. The company decides to order a quantity that exactly equals the mean of its demand forecast.
Answers (1)
Which of the following types of advertisements is particularly expensive 1: Internet Ads 2: Newspaper Ads 3: TV infomercials 4: Radio ads
Answers (2)
Used to access a list of sales and expense transactions A customer in the Sample Company A vendor in the Sample Company Matching a banking transaction with a QBO transaction Bank deposits not yet recognized Bank charges not yet recognized Exist for
Answers (1)
A company expects the following sales for the coming year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units 50,000 40,000 70,000 90,000 Average selling price $6 $6 $6 $8 Budgeted sales revenue for the year is: a.$1,050,000. b.
Answers (1)
Home » Business » Scenario: Open Economy S = I In an open economy GDP is $12 trillion this year. Consumption is $8 trillion, and government spending is $2 trillion. Taxes are $0.5 trillion. Exports are $1 trillion, and imports are $3 trillion.
Sign Up Forgot Password?