For a closed economy,GDP is $18 trillion,consumption is $13 trillion,taxes are $2 trillion and the government runs a deficit of $1 trillion.What are private saving and national saving?
A)$3 trillion and $1 trillion,respectively
B)$3 trillion and $2 trillion,respectively
C)$2 trillion and $3 trillion,respectively
D)$2 trillion and $2 trillion,respectively

Question

Quizplus · Accepted Answer

Private saving is calculated as GDP - Consumption - Taxes, which is $18 trillion - $13 trillion - $2 trillion = $3 trillion. National saving is private saving plus public saving. Since the government runs a deficit of $1 trillion, public saving is -$1 trillion. Therefore, national saving is $3 trillion - $1 trillion = $2 trillion.

For a Closed Economy,GDP Is $18 Trillion,consumption Is $13 Trillion,taxes