Question

Scenario 22-3: Economy of Centralia Centralia has no trade and no government. GDP = $25 trillion. Consumption Spending = $18 trillion. Use Scenario 22-3. Consider the information on the economy of Centralia. What is the level of private saving in Centralia?

Answer 1

Answer:

The level of private saving in Centralia is $7 trillion.

Explanation:

The economy of Centralia has no trade and no government.

The level of GDP is given as $25 trillion.  

Consumer spending is $18 trillion.  

The level of private savings, in this case, will be the difference between the GDP or total income and consumption spending.  

Private savings  

= $25 trillion - $18 trillion

= $7 trillion