Question

Consider the following data for a closed economy:

MyLab Statistics Homework x Do Homework x Mylab Economics All AS - c mathxl.com/Student/PlayerHomework.aspx?homeworkid=562514975&questionid € SP20: INTRO TO MACROECONOMICS: 27726 Homework: HW #6 Score: 0 of 2 pts End of Chapter 2.8 Consider the following data for a closed economy Y = $12 trillion C = $10 trillion G = $3 trillion Souble-1.0 trillion T = $4 trillion Use the data to calculate the following: (Enter your responses rounded to one decimal place.) a. Private saving is: $ trillion.

Answer 1

Answer: - $2 trillion

A private saving(S) is equal to the disposable income(income after the tax payment) minus the consumption spending(C).

Or, S = (Y -T) - C , where 'Y' stands for money income , and 'T' stands for tax payment.

Or, S = Y - T - C

In a closed economy, the total private saving in the economy is as follows;

S_private = Y - T - C, where Y is national income, C is total consumption expenditure and, T is total tax payment.

Or, S_private = Y - T - C

Thus from the given given data, we get the S_private in the closed economy as below,

S_private = $12 trillion - $4 trillion - $10 trillion

Or, S_private = $12 trillion - $14 trillion

Or, S_private = - $2 trillion

Thus private saving is : - $2 trillion

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