Question

Again, please consider the closed economy of Economia, which has the following information:

$6500 consumption
$7500 government spending (NOT including transfer payments)
$10,000 overall taxes
$2000 transfer payments
$18,000 total income (output)

Carefully following all instructions, calculate (total) national savings for this economy.

Answer 1

Answer:

$4,000

Explanation:

The computation of the total national saving is shown below:

As we know that

National savings = Total income - consumption - government spending

= $18,000 - $6,500 - $7,500

= $4,000

By deducting the consumption and the government spending from the total income we can get the national savings and the same is applied