As per the information provided in the question
Investment (J) =$2.5 trillion
Tax paid to Government (R) =$2.0 trillion
Demand from rest of the world (Z) or Export =$1.5 trillion
Import (not given) = 0
Factor income received by household (Q) =$11.0 trillion
Government expenditure (U) =$1.0 trillion
In a four sector economy, the economy will be at equilibrium level when
Savings + Tax paid to Government + Import = Investment + Government expenditure + Export
Savings + $2.0 + 0 = $2.5 + $1.0 + $1.5
Savings + $2.0 = $5.0
Savings = $5.0 - $2.0 = $3.0 trillion
Savings = $3.0 trillion
Factor income received by household = Consumption Expenditure + savings + Tax paid to Government
Consumption Expenditure = Factor income received by household – (savings + Tax paid to Government)
Consumption Expenditure = $11.0 – ($3.0 + $2.0) =$11.0 - $5.0 = $6.0 trillion
Consumption Expenditure = $6.0 trillion
The figure shows the flows of expenditure and income in an economy In 2008, J was...
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