For a closed economy,GDP is $11 trillion,consumption is $7 trillion,taxes are $2.5 trillion and the government runs a surplus of $1 trillion.What are private saving and national saving?
A)$1.5 trillion and $2.5 trillion,respectively
B)$2.5 trillion and $1.5 trillion,respectively
C)$2.5 trillion and $2.5 trillion,respectively
D)$1.5 trillion and $1.5 trillion,respectively

Question

Quizplus · Accepted Answer

Private saving = Y - T - C = $11 trillion - $2.5 trillion - $7 trillion = $1.5 trillion

National saving = Y - C - G = $11 trillion - $7 trillion - ($1 trillion) = $3 trillion

Since national saving consists of both private saving and public saving (or the government surplus), we can also calculate it as:

National saving = Sprivate + Spublic = $1.5 trillion + $1 trillion = $2.5 trillion

For a Closed Economy,GDP Is $11 Trillion,consumption Is $7 Trillion,taxes