Question

Consumption = $1,000; investment = $200; net exports = -$50; taxes = $230; private saving = $225; and national saving = $150. 56. Refer to Scenario 26-3. For this economy, government purchases amount to

Answer 1

$305

Step-by-step explanation:

For computing the government purchase, first we have to determine the public saving which is shown below:

Public saving = National saving - private saving

= $150 - $225

= -$75

And the public saving would also equal to

Public saving = Taxes - Government purchase

-$75 = $230 - Government purchase

So, the government purchase would be

= $230 + $75

= $305