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8 March, 00:31

In an open economy, GDP is $12 trillion this year. Consumption is $8 trillion, and government spending is $2 trillion. Taxes are $0.5 trillion. Exports are $1 trillion, and imports are $3 trillion. How much is private saving

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  1. 8 March, 02:33
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    Answer: Private savings is $3.5 trillion

    Explanation:

    Private saving firstly is the amount that households are left over with after paying their taxes and consumption spending.

    therefore we will use the formula private savings = Y-C-T, in which Y is the economies GDP, C is consumption in the economy, T is the Taxes paid by the households to government.

    now we substitute these values on the above mentioned formula:

    Private savings = $12 trillion - $8trillion - $0.5 trillion

    =$ 3.5 trillion therefore private savings is $3.5 trillion.
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Home » Business » In an open economy, GDP is $12 trillion this year. Consumption is $8 trillion, and government spending is $2 trillion. Taxes are $0.5 trillion. Exports are $1 trillion, and imports are $3 trillion. How much is private saving
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