Question

In an open economy, gross domestic product equals $3,500 billion, consumption expenditure equals $2100 billion, government expenditure equals $400 billion, investment equals $800 billion, and net exports equals $200 billion. What is national savings? Group of answer choices
a.$200 billion
b.$600 billion
c.$800 billion
d.$1,000 billion

Answer 1

Answer:

option (d) $1,000 billion

Explanation:

Data provided in the question:

Gross domestic product = $3,500 billion

Consumption expenditure = $2,100 billion

Government expenditure = $400 billion

Investment = $800 billion

Net exports = $200 billion

Now,

National savings

= GDP - (Consumption expenditure + Government consumption)

= $3,500 billion - ( $2,100 billion + $400 billion )

= $1,000 billion

Hence,

The answer is option (d) $1,000 billion