Question 15 Scenario 21-1 Consider the following data for a closed economy, assuming no interest payments: Y= $12 trillion C = $8 trillion |= $2 trillion G= $2 trillion Transfers = $2 trillion Taxes = $3 trillion Refer to Scenario 21-1. Based on the information above, what is the level of private saving in the economy: $3 trillion $4 trillion $5 trillion $8 trillion

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Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.