I\'m not sure how to find TR. If we rearrange the equation showing the relations

Question

I'm not sure how to find TR.

If we rearrange the equation showing the relationship between GDP and its components, we have an expression for investment in terms of the other variables: I-Y-C-G This expression tells us that in a closed economy, investment spending is equal to total income minus consumption spending and minus government purchases We can also derive an expression for total saving. Private saving is equal to what households retain of their income after purchasing goods and services (C) and paying taxes (T) iyi household income is equal to Y. Households also receive income from government in the form of transfer payments (TR), which include Social Security payments and unemployment insurance payments. We can write this expression for private saving (SPrivate): SPrivate =Y+TR-C-T. The government also engages in saving. Public saving (SPublic) equals the amount of tax

Explanation / Answer

We have,

Public Savings (Spublic) = T - G - TR

- 0.5 = 4 - 2 - TR

TR = 2.5 trillion

Sprivate = Y + TR - C - T

Sprivate = 15 + 2.5 - 10 - 4 = 3.5 trillion

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Investment Spending(I) = Y - C - G

I = 15 - 10 - 2

I = 3 trillion.

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