Scenario 26-2. Assume the following information for an imaginary, closed economy

ID: 2443687 • Letter: S

Question

Scenario 26-2. Assume the following information for an imaginary, closed economy.

GDP = $5 trillion; consumption = $3.1 trillion;

government purchases = $0.7 trillion; and taxes = $0.9 trillion.

Refer to Scenario 26-2. For this economy, private saving is equal to

$0.3 trillion.

$1.2 trillion.

$1.0 trillion.

$1.7 trillion.

Scenario 26-2. Assume the following information for an imaginary, closed economy.

GDP = $5 trillion; consumption = $3.1 trillion;

government purchases = $0.7 trillion; and taxes = $0.9 trillion.

Private Savings is given by the formula,

S.pvt = GDP - Consumption - Taxes.

S.pvt = 5 - 3.1 - 0.9 = 1.0.

The correct answer is, c. $1.0 trillion.

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