DP is $12 trillion this year in a closed economy. Consumption is $8 trillion and government spending is $2 trillion. Taxes are $0.5 trillion. How much is investment spending? $3.5 trillion $3 trillion $2.5 trillion $2 trillion

The investment spending is $2 trillion, the last option given in the question.

Explanation:

The formula for GDP for a closed economy is given below:

GDP=C+I+G

where C is the consumption expenditure of the households given as $8 trillion

I is the investment spending in the economy which is unknown

G is government expenditure given as $2 trillion

12 trillion=$8 trillion+I+$2 trillion

12 trillion=10 trillion+I

I=$12 trillion-$10 trillion

I = $2 trillion

The correct answer is $2 trillion, the last option