Welcome to Westonci.ca, your ultimate destination for finding answers to a wide range of questions from experts. Explore our Q&A platform to find in-depth answers from a wide range of experts in different fields. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.
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.
We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Find reliable answers at Westonci.ca. Visit us again for the latest updates and expert advice.
