In a closed economy,if Y is 10,000,T is 1,000,G is 3,000,and C is 5,000,then
A)the government has a budget surplus and investment is 1,000
B)the government has a budget surplus and investment is 2,000
C)the government has a budget deficit and investment is 1,000
D)the government has a budget deficit and investment is 2,000

Question

Quizplus · Accepted Answer

The government budget deficit is G - T = 3,000 - 1,000 = 2,000. National saving is Y - C - G = 10,000 - 5,000 - 3,000 = 2,000, which equals investment in a closed economy.

In a Closed Economy,if Y Is 10,000,T Is 1,000,G Is