Question

i just need the national saving rate for the last two, b and c, I answered everything else by myself and i just need the national saving for B and C

In each part that follows, use the economic data given to find national saving, private saving, public saving, and the national saving rate.

a. Household saving = 200     Business saving = 400

     Government purchases of goods and services = 100

     Government transfers and interest payments = 100

     Tax collections = 150     GDP = 2,200

Instructions: Enter your response for the national saving rate rounded to one decimal place. If you are entering any negative numbers, be sure to include a (-) in front of those numbers.

National saving	Private saving	Public saving	National saving rateiff
550 550 Correct	600 600 Correct	-50 -50 Correct	25 25 Correct %

b. GDP = 6,000     Tax collections = 1,200

     Government transfers and interest payments = 400

     Consumption expenditures = 4,500

     Government budget surplus = 100

Instructions: Enter your response for the national saving rate rounded to one decimal place. If you are entering any negative numbers, be sure to include a (-) in front of those numbers.

National saving	Private saving	Public saving	National saving rate
800 800 Correct	700 700 Correct	100 100 Correct	????

c. Consumption expenditures = 4,000     Investment = 1,000

     Government purchases = 1,000     Net exports = 0

     Tax collections = 1,500

     Government transfers and interest payments = 500

Instructions: Enter your response for the national saving rate rounded to one decimal place. If you are entering any negative numbers, be sure to include a (-) in front of those numbers.

National saving	Private saving	Public saving	National saving rate
1000 1000 Correct	1000 1000 Correct	0 0 Correct	????

Answer 1

As answer to part (b) and (c) have been asked, here are the step by step solution:

(b) Given that,

GDP = 6,000

Tax collections = 1,200

Govt transfers and interest payments = 400

Govt budget surplus = 100

Consumption expenditures = 4,500

We can calculate

1. Private sector disposable income = GDP - Taxes + Transfers = 6,000 - 1,200 + 400 = 5,200
2. Private sector savings = disposable income - consumption = 5,200 - 4,500 = 700
3. Govt savings = Govt budget surplus = 100
4. National savings = Private savings + Govt savings = 700 + 100 = 800
5. National savings rate = National savings / GDP = 800 / 6,000 = 0.1333 or 13.33 percent
6. government budget surplus =100, we can calculate government spending as

100 = Taxes - Transfers - Govt spending

100 = 1,200 - 400 - G

From which it follows that G = 1,200 - 400 - 100 = 700

(c) Given that:

Consumption expenditure= 4,000

Investment = 1,000

Govt purchases = 1,000

Net exports = 0

Tax collections = 1,500

Government transfers and interest payments = 500

1. GDP = C + I + G + NX = 4,000 + 1,000 + 1,000 + 0 = 6,000
2. Govt savings = Taxes - Transfers - Govt spending = 1,500 - 500 - 1,000 = 0
3. Private sector disposable income = GDP - Taxes + Transfers = 6,000 - 1,500 + 500 = 5,000
4. Private sector savings = disposable income - consumption = 5,000 - 4,000 = 1,000
5. National savings = Private savings + Government savings = 1,000 + 0 = 1,000
6. National savings rate = National savings / GDP = 1,000 / 6,000 = 0.1667 or 16.67 percent