The country of Yokovia does not trade with any other country.Its GDP is $20 billion.Its government collects $2 billion in taxes.Consumption equals $15 billion and investment equals $2 billion.What is public saving in Yokovia,and what is the value of the goods and services purchased by the government of Yokovia?
A)-$2 billion and $1 billion.
B)$1 billion and $1 billion.
C)-$1 billion and $3 billion.
D)-$2 billion and $3 billion.

Question

Quizplus · Accepted Answer

Public saving (Spublic) = T (taxes) - G (government purchases) = $2 billion - G.
Solving for G, we get G = $3 billion.
Therefore, public saving is -$1 billion (since $2 billion - $3 billion = -$1 billion).
The value of goods and services purchased by the government (G) is $3 billion.

The Country of Yokovia Does Not Trade with Any Other