Using the information given below for the fictitious country "Alpha," find national saving, private saving, public saving, and the national saving rate.

Household saving = 200, Business saving = 300, Government purchases of goods and services = 80, Government transfers and interest payments = 100, Tax collections = 220, and GDP = 1,800.

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Glenn Nolan

24 July, 09:10

Using the information given below for the fictitious country "Alpha," find national saving, private saving, public saving, and the national saving rate.

Household saving = 200, Business saving = 300, Government purchases of goods and services = 80, Government transfers and interest payments = 100, Tax collections = 220, and GDP = 1,800.

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Sabrina Colon · Answer 1

Answer in explanation

Explanation:

We calculate each of the metrics for the country Alpha using the appropriate formula;

National saving

Mathematically, National saving = Public saving + Private saving

Private saving = Total income - Tax Revenue - Consumption or Y - T - C or household + Business savings = 200 + 300 = 500

Public saving

Mathematically, Public saving = Tax revenue - expenditures = T - G = 220 - (80 + 100) = 40

National saving is thus: 500 + 40 = 540

National saving rate

Mathematically, National saving rate = (National saving * 100) / GDP = (540 * 100) / 1800 = 30%