Show the solution. Suppose GDP equals $30 trillion, consumption equals $20 trillion, the government spends $4 trillion and has a budget deficit of $900 billion.  Find: (1) Public saving, (2) Net taxes (3) Private saving  (4) National saving

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Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.