Consider a closed economy where total output (income) is $500,000. Households spend $300,000 on non-home goods and services, and the government collects $50,000 in taxes and spends $40,000, $10,000 of which goes toward a Welfare program. There is also some amount of business spending on inventories and productive assets. a. Calculate this economy's total savings. b. Calculate this economy's private savings.
Consider a closed economy where total output (income) is $500,000. Households spend $300,000 on non-home goods and services, and the government collects $50,000 in taxes and spends $40,000, $10,000 of which goes toward a Welfare program. There is also some amount of business spending on inventories and productive assets. a. Calculate this economy's total savings. b. Calculate this economy's private savings.
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 3SQ
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Consider a closed economy where total output (income) is $500,000. Households spend $300,000 on non-home goods and services, and the government collects $50,000 in taxes and spends $40,000, $10,000 of which goes toward a Welfare program. There is also some amount of business spending on inventories and productive assets.
a. Calculate this economy's total savings.
b. Calculate this economy's private savings.
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