We have the following data for a hypothetical open economy: GNP = $14 comma 00014,000 Consumption (C) = $7 comma 5007,500 Investment (I) = $1 comma 0001,000 Government Purchases (G) = $1 comma 2001,200 Tax Collections (T) = $1 comma 2001,200 What is the value of private savings plus public savings? $nothing (Enter your answer as an integer. Include a minus sign if necessary.

Question

Business

Kirby

3 December, 01:11

We have the following data for a hypothetical open economy: GNP = $14 comma 00014,000 Consumption (C) = $7 comma 5007,500 Investment (I) = $1 comma 0001,000 Government Purchases (G) = $1 comma 2001,200 Tax Collections (T) = $1 comma 2001,200 What is the value of private savings plus public savings? $nothing (Enter your answer as an integer. Include a minus sign if necessary.

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Answers (1)

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Sarge · Answer 1

Answer: $5,300

Explanation:

Private Saving refers to money that households did not consume nor pay as taxes so the formula is;

= Output - Consumption - Taxes

= 14,000 - 7,500 - 1,200

= $5,300

Public Saving refers to money that the government got as revenue but did not spend so the formula is;

= Taxes - Government Spending

= 1,200 - 1,200

= $0

Total Saving (Private + Public Saving)

= 5,300 + 0

= $5,300