In a closed economy taxes are $750 billion, government expenditures are $900 billion, and investment is...

In a closed economy taxes are $750 billion, government expenditures are $900 billion, and investment is $400 billion. What are private saving, public saving and national saving?

Expert Solution

National Saving is sum of private saving and public saving.

National saving is equal to the investment.

As it has been given that in a closed economy taxes are $750 billion, government expenditures are $900 billion, and investment is $400 billion.

Public saving= taxes – government expenditure

=750-900

=150 billion

National saving=$400 billion

Private saving= national saving – public saving

=400-150

=$250 billion

Rahul Sunny answered 2 years ago

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