Question

Consider the following data for a closed​ economy: Y​ = ​$1414 trillion C​ = ​$1010 trillion G​ = ​$33 trillion Spublic​ = ​$negative 1.0−1.0 trillion T​ = ​$44 trillion Use the data to calculate the​ following: ​(Enter your responses rounded to one decimal place.​) a. Private saving​ is: ​$______ trillion.

Answer 1

$393 trillion

Step-by-step explanation:

Private saving

= Y + TR – C – T

Y= $1414 trillion

TR=​$33 trillion

C​ = ​$1010 trillion

T​ = ​$44 trillion

Using the formula

Y + TR – C – T

= $1414 trillion + $33 trillion – 1010 trillion – $44 trillion = $393 trillion

Answer 2

Private savings = $360 trillion

Step-by-step explanation:

Private savings is a summation of household and business savings. When there is economic growth there is stimulation of private savings, people have more money to save.

Private savings also drives economic growth because people have more money to invest in businesses that will have a higher output.

In a closed economy the formula for private savings is

Private savings = Y + TR - C - T

Private savings= 1414 trillion + 0 - 1010 trillion - 44 trillion

Private savings = $360 trillion