IDNLearn.com: Where curiosity meets clarity and questions find their answers. Get timely and accurate answers to your questions from our dedicated community of experts who are here to help you.
Sagot :
Answer:
Consumption (C ) = $600 billion,
- Government spending (G ) = $130 billion,
- Investment ( I) = $70 billion.
Explanation:
In a closed economy, the fundamental national income identity is given by:
Y = C + I + G
where:
- Y is the GDP,
- C is consumption,
- I is investment,
- G is government spending.
We are given the following values:
- GDP ( Y ) = $800 billion,
- Taxes ( T ) = $150 billion,
- Private saving ( Sp ) = $50 billion,
- Public saving (Sg ) = $20 billion.
We also know that in a closed economy:
National saving (S) = Private saving+ Public saving
Therefore,
S = Sp + Sg
S = 50 + 20
S = 70
In a closed economy, national saving is also equal to investment:
S = I
I = 70
Next, we need to determine consumption (C ) and government spending ( G ).
From the information given, we can find the government budget. The government budget can be described as:
\[ \text{Public saving} = T - G \]
Given public saving (\( S_g \)) is $20 billion and taxes (\( T \)) are $150 billion:
Sg = T _ G
20 = 150 - G
G = 150 - 20
G = 130
Now we have the values for ( Y ), ( I ), and ( G ):
Y = C + I + G
800 = C + 70 + 130
800 = C + 200
C = 800 - 200
C = 600
Thus, we have:
- Consumption ( C ) = $600 billion,
- Government spending ( G ) = $130 billion,
- Investment (I ) = $70 billion.
Thank you for contributing to our discussion. Don't forget to check back for new answers. Keep asking, answering, and sharing useful information. Your questions are important to us at IDNLearn.com. Thanks for stopping by, and come back for more reliable solutions.
