Table 26-1. The following table presents information about a closed economy whose market for loanable funds is in equilibrium.

$$\begin{array} { | l | l | }
\hline \text { GDP } & \$ 8.3 \text { trillion } \
\hline \text { Consumer Spending } & \$ 5.1 \text { trillion } \
\hline \text { Taxes Minus Transfers } & \$ 1.9 \text { trillion } \
\hline \text { Government Purchases } & \$ 0.5 \text { trillion } \
\hline
\end{array}$$
-Refer to Table 26-1. The quantity of private saving is
A)$3.2 trillion.
B)$1.3 trillion.
C)$2.7 trillion.
D)$6.4 trillion.

Question

Table 26-1. The following table presents information about a closed economy whose market for loanable funds is in equilibrium.
​
​
 $$\begin{array} { | l | l | } 
\hline \text { GDP } & \$ 8.3 \text { trillion } \
\hline \text { Consumer Spending } & \$ 5.1 \text { trillion } \
\hline \text { Taxes Minus Transfers } & \$ 1.9 \text { trillion } \
\hline \text { Government Purchases } & \$ 0.5 \text { trillion } \
\hline
\end{array}$$ ​
-Refer to Table 26-1. The quantity of private saving is
A)$3.2 trillion.
B)$1.3 trillion.
C)$2.7 trillion.
D)$6.4 trillion.

Quizplus · Accepted Answer

Private saving is calculated as the difference between what households earn (which is GDP minus taxes plus transfers) and what they spend on consumption. In this case, it's $ \$8.3 \text{ trillion} - \$1.9 \text{ trillion} - \$5.1 \text{ trillion} = \$1.3 \text{ trillion}. $

Table 26-1 ​ -Refer to Table 26-1

Table 26-1
-Refer to Table 26-1