Answered

Find detailed and accurate answers to your questions on IDNLearn.com. Join our interactive community and access reliable, detailed answers from experienced professionals across a variety of topics.

Suppose GDP in this country is [tex]$\$ 950$[/tex] million. Enter the amount for government purchases.

Value | National Income Account (Millions of dollars)
---|---
Government Purchases [tex]$(G)[tex]$[/tex] | 1,975
Taxes minus Transfer Payments [tex]$[/tex](T)$[/tex] | 325
Consumption [tex]$(C)$[/tex] | 500
Investment [tex]$(I)$[/tex] | 200

Complete the following table by using national income accounting identities to calculate national saving. In your calculations, use data from the preceding table.

[tex]
\text { National Saving } \begin{aligned}
(S) & =\frac{Y - C - G}{Y} \\
& = \square
\end{aligned}
[/tex]

Complete the following table by using national income accounting identities to calculate private and public saving. In your calculations, use data from the initial table.

[tex]
\begin{aligned}
\text { Private Saving } & =Y - T - C \\
& = \square
\end{aligned}
[/tex]

[tex]
\begin{aligned}
\text { Public Saving } & =T - G \\
& = \square
\end{aligned}
[/tex]

Based on your calculations, the government is running a budget [tex]\square[/tex].

Sagot :

GinnyAnsweridn
Let's break down the solution step by step. We'll use the given data and national accounting identities to find national saving, private saving, public saving, and the budget status.

### Given Data:
- Gross Domestic Product (GDP), [tex]\( Y \)[/tex]: \[tex]$950 million - Government Purchases, \( G \): \$[/tex]1,975 million
- Taxes minus Transfer Payments, [tex]\( T \)[/tex]: \[tex]$325 million - Consumption, \( C \): \$[/tex]500 million
- Investment, [tex]\( I \)[/tex]: \[tex]$200 million ### 1. Calculating National Saving \( S_n \): National saving \( S_n \) can be calculated by the formula: \[ S_n = Y - C - G \] Substituting the given values: \[ S_n = 950 - 500 - 1975 \] \[ S_n = 950 - 500 = 450 \] \[ S_n = 450 - 1975 = -1525 \] So, National Saving is \(\$[/tex] -1525\) million.

### 2. Calculating Private Saving [tex]\( S_p \)[/tex]:

Private saving [tex]\( S_p \)[/tex] can be calculated by the formula:
[tex]\[ S_p = Y - T - C \][/tex]

Substituting the given values:
[tex]\[ S_p = 950 - 325 - 500 \][/tex]
[tex]\[ S_p = 950 - 825 = 125 \][/tex]

So, Private Saving is [tex]\(\$ 125\)[/tex] million.

### 3. Calculating Public Saving [tex]\( S_{gov} \)[/tex]:

Public saving [tex]\( S_{gov} \)[/tex] can be calculated by the formula:
[tex]\[ S_{gov} = T - G \][/tex]

Substituting the given values:
[tex]\[ S_{gov} = 325 - 1975 \][/tex]
[tex]\[ S_{gov} = -1650 \][/tex]

So, Public Saving is [tex]\(\$ -1650\)[/tex] million.

### 4. Determining the Budget Status:

The budget status depends on the value of public saving:
- If [tex]\( S_{gov} \)[/tex] is positive, the government is running a budget surplus.
- If [tex]\( S_{gov} \)[/tex] is negative, the government is running a budget deficit.

Since [tex]\( S_{gov} = -1650 \)[/tex], the government is running a budget deficit.

### Summary Table:

| Metric | Value (\[tex]$ Million) | |-------------------|--------------------| | National Saving | -1525 | | Private Saving | 125 | | Public Saving | -1650 | | Budget Status | Deficit | So based on these calculations, the government purchases are \$[/tex]1975 million, the national saving is \[tex]$-1525 million, private saving is \$[/tex]125 million, public saving is \$-1650 million, and the government is running a budget deficit.
We appreciate your contributions to this forum. Don't forget to check back for the latest answers. Keep asking, answering, and sharing useful information. IDNLearn.com is your source for precise answers. Thank you for visiting, and we look forward to helping you again soon.