Suppose GDP in this country is $1,540 million. Enter the amount for government p

Question

Suppose GDP in this country is $1,540 million. Enter the amount for government purchases Value National Income Account Government Purchases (G) Taxes minus Transfer Payments (T) Consumption (C) Investment (I) (Millions of dollars) 1,645 455 700 490 Complete the following table by using national income accounting identities to calculate national saving. In your calculations, use data from the preceding table National Saving (S) - million Complete the following table by using national income accounting identities to calculate private and public saving. In your calculations, use data from the initial table Private Saving - million Public Saving - million Based on your calculations, the government is running a budget

Explanation / Answer

Ans :National saving ( S ) = negative and S = - $805 million

Explanation:

National savings = Public savings + Private savings

= - $1190 + $385

= - $805

Ans : Private saving = positive and $385 million

Explanation:

Private savings = Y - T - C

= $1540 million - $455 million - $700 million

= $ 1540 - $1155 = $ 385 million

Ans :Public saving = negative and - $1190 million

Explanation:

Public Savings = T - G

= $455 million - $ 1645 million

= - $1190

Ans : The government is running a budget deficit.

Explanation :

Deficit budget occurs when government expenditure is greater than the government revenue.

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