Suppose the economy is closed with national saving of $3 trillion,consumption of $10 trillion,and government purchases of $4 trillion.What is GDP?
A)$3 trillion
B)$9 trillion
C)$11 trillion
D)$17 trillion

Question

Quizplus · Accepted Answer

In a closed economy, GDP (Y) is calculated as the sum of consumption (C), investment (I), and government purchases (G). National saving (S) is equal to investment (I) in a closed economy. Given S = $3 trillion, C = $10 trillion, and G = $4 trillion, GDP = C + I + G = $10 trillion + $3 trillion + $4 trillion = $17 trillion.

Suppose the Economy Is Closed with National Saving of $3