Answered: Saving and investment in the national…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Saving and investment in the national income accounts

The following table contains data for a hypothetical closed economy that uses the dollar as its currency.

Suppose GDP in this country is $950 million. Enter the amount for investment.

National Income Account	Value
(Millions of dollars)
Government Purchases (G�)	250
Taxes minus Transfer Payments (T�)	325
Consumption (C�)	500
Investment (I�)

Complete the following table by using national income accounting identities to calculate national saving. In your calculations, use data from the preceding table.

National Saving (S)National Saving (�)

Y-C-G or G-T or Y-C or Y-T-G

=	C or Y or I or G

$ __________ Million

Complete the following table by using national income accounting identities to calculate private and public saving. In your calculations, use data from the initial table.

Private Saving

Y-C-T or T-G or C-T or Y-T-I

= $ __________ Million

Public Saving

Y-C-T or T-G or C-T or Y-T-I

= $ __________ Million

Based on your calculations, the government is running a budget (SURPLUS or DEFICIT)

Expert Solution

Step 1

GDP is the sum of consumption, investment, government expenditure and net exports in an open economy. It can be written as follows :

GDP = C + I + G + NX

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

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