For an imaginary closed economy,T = $5,000;S = $11,000;C = $48,000;and the government is running a budget surplus of $1,000.Then
A)private saving = $10,000 and GDP = $55,000.
B)private saving = $10,000 and GDP = $63,000.
C)private saving = $12,000 and GDP = $67,000.
D)private saving = $12,000 and GDP = $69,000.

Question

Quizplus · Accepted Answer

Private saving is calculated as S = Y - T - C. Given S = $11,000, T = $5,000, and C = $48,000, private saving is $10,000. The government budget surplus is $1,000, so government saving is $1,000. Total saving (S) is private saving plus government saving, which is $11,000. GDP (Y) is calculated as C + S + T, which equals $63,000.

For an Imaginary Closed Economy,T = $5,000;S = $11,000;C =