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?

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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 1 year ago

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