Question

If a country's economic data show private savings (S) of $9 billion, government spending (G) of $7 billion, tax revenue (T) of $7 billion, and a trade surplus (X-M) of $3 billion, then what does private investment (I) equal?

Answer 1

Answer: $6 billion

Step-by-step explanation:

Savings = Private Investment + Trade Surplus - (Tax revenue - Government spending)

Private Investment = Savings + (Tax revenue - Government spending) - Trade surplus

= 9 + ( 7 - 7 ) - 3

= $6 billion