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National savings is calculated as the sum of private and public savings. Private savings is equal to household income plus transfer payments received minus taxes paid and what is spent for household expenditures. Public savings is equal to the government budget, which in turn equals

National savings is calculated as the sum of private and public savings. Private savings is equal to household income plus transfer payments received minus taxes paid and what is spent for household expenditures. Public savings is equal to the government budget, which in turn equals

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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National savings is calculated as the sum of private and public savings. Private savings is equal to household income plus transfer payments received minus taxes paid and what is spent for household expenditures. Public savings is equal to the government budget, which in turn equals taxes received minus transfer payments minus government expenditures. Consider the following data for a closed economy (a country in which there are no imports or exports): GDP = $12 trillion Consumption = $8 trillion Investment = $2 trillion Transfer payments = $1 trillion Taxes = $2 trillion %3D Calculate government purchases, public savings (make sure to indicate whether the government has a budget surplus or deficit), private savings, and national savings.
Transcribed Image Text:National savings is calculated as the sum of private and public savings. Private savings is equal to household income plus transfer payments received minus taxes paid and what is spent for household expenditures. Public savings is equal to the government budget, which in turn equals taxes received minus transfer payments minus government expenditures. Consider the following data for a closed economy (a country in which there are no imports or exports): GDP = $12 trillion Consumption = $8 trillion Investment = $2 trillion Transfer payments = $1 trillion Taxes = $2 trillion %3D Calculate government purchases, public savings (make sure to indicate whether the government has a budget surplus or deficit), private savings, and national savings.
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