Suppose a closed economy had public saving of -$1 trillion and private saving of $3 trillion.What are national saving and investment for this country?
A)$2 trillion,$2 trillion
B)$2 trillion,$3 trillion
C)$3 trillion,$3 trillion
D)$4 trillion,$2 trillion

Question

Quizplus · Accepted Answer

National saving is the sum of public and private saving. Here, national saving is $3 trillion (private) - $1 trillion (public) = $2 trillion. In a closed economy, national saving equals investment, so investment is also $2 trillion.

Suppose a Closed Economy Had Public Saving of -$1 Trillion