Suppose GDP is Rs.8 trillion, taxes are Rs.1.6 trillion, private saving is Rs.0.5 trillion, and public saving is Rs.0.2 trillion.Assuming this economy is closed, calculatea. consumption, Blank 1b. government purchases, Blank 2c. national saving, Blank 3d. investment. Blank 4

Suppose GDP is Rs.8 trillion, taxes are Rs.1.6 trillion, private saving is Rs.0.5 trillion, and public saving is Rs.0.2 trilion. Assuming this economy is closed, calculate a. consumption, Blank 1 b. government purchases, Blank 2 c. national saving, Blank 3 d. investment., Blank 4

Suppose GDP is Rs.8 trillion, taxes are Rs.1.6 trillion, private saving is Rs.0.5 trillion, and public saving is Rs.0.2 trilion. Assuming this economy is closed, calculate a. consumption, Blank 1 b. government purchases, Blank 2 c. national saving, Blank 3 d. investment., Blank 4

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Savings,investment And The Financial System

Section: Chapter Questions

Problem 4PA

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Concept explainers

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.

Question

Suppose GDP is Rs.8 trillion, taxes are Rs.1.6 trillion, private saving is Rs.0.5 trillion, and public saving is Rs.0.2 trillion.
Assuming this economy is closed, calculate
a. consumption, Blank 1
b. government purchases, Blank 2
c. national saving, Blank 3
d. investment. Blank 4

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