An economy has the following data:real GDP $5,166 billiontaxes collected by the government $499 billiongovernment spending $658 billionconsumption spending $3,666 billion.If this is a closed economy, what is the value of investment spending?Enter a whole number with no dollar sign and please do not include the word billion.ASUS45

Answered: An economy has the following data: real…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

An economy has the following data:
real GDP $5,166 billion
taxes collected by the government $499 billion
government spending $658 billion
consumption spending $3,666 billion.
If this is a closed economy, what is the value of investment spending?
Enter a whole number with no dollar sign and please do not include the word billion.
ASUS
45

Expert Solution

Step 1

GDP: It refers to the goods and services which can be produced in an economy during a particular period. The GDP also shows the total level of income of an economy.

Step 2

In a closed economy,

Real GDP = Consumption spending + Investment spending + Government spending

Real GDP = $5166 billion

Consumption spending = $3666 billion

Government spending = $658 billion

$5166 billion = $3666 billion + Investment spending + $658 billion

Investment spending = (5166 - 3666 - 658) = $842 billion

Step by step

Solved in 3 steps

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions