(Advanced analysis)Answer the question on the basis of the following information for a private open economy.The letters Y,C,I_g,X,and M stand for GDP,consumption,gross investment,exports,and imports respectively.Figures are in billions of dollars. $\begin{array} { l } C = 40 + 0.8 Y \ t _ { g } = \overline { I _ { g } } = 40 \ X = \bar { X } = 20 \ M = \bar { M } = 30 \end{array}$ Refer to the information.In equilibrium,saving is: A) $20. B) $30. C) $40. D) $50.

Question

Quizplus · Accepted Answer

In a private open economy with flexible exchange rates, S = I + NX, where S is savings, I is gross investment, and NX is net exports. 
S = Y - C 
I = U1B1g 
NX = X - M 
Therefore, in equilibrium: 
Y - C = U1B1g + X - M 
Substituting the given values, we get: 
40 - C = 30 + 20 - 10 
Simplifying, we get: 
C = $30 
Therefore, S = Y - C = 40 - 30 = $10 
However, the question asks for savings in equilibrium, which is equal to gross investment plus net exports. 
Therefore, S = I + NX = U1B1g + X - M = 20 + 10 = $30.

(Advanced Analysis)Answer the Question on the Basis of the Following C=40+0.8Ytg=Ig‾=40X=Xˉ=20M=Mˉ=30\begin{array} { l } C = 40 + 0.8 Y \\t _ { g } = \overline { I _ { g } } = 40 \\X = \bar { X } = 20 \\M = \bar { M } = 30\end{array}C=40+0.8Ytg​=Ig​​=40X=Xˉ=20M=Mˉ=30​

(Advanced Analysis)Answer the Question on the Basis of the Following $\begin{array} { l } C = 40 + 0.8 Y \\t _ { g } = \overline { I _ { g } } = 40 \\X = \bar { X } = 20 \\M = \bar { M } = 30\end{array}$