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Calculate private saving, taxes, public saving, national saving, and investment given certain values.

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User Lushawn
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1 Answer

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Final answer:

To calculate private saving, taxes, public saving, national saving, and investment, we need to use the provided information and formulas. Private saving is the part of income not spent on consumption or taxes, taxes are calculated using the tax rate and income, public saving is the income not spent on consumption or private saving, national saving is the sum of private saving and public saving, and investment is calculated using government spending, exports, and imports.

Step-by-step explanation:

To calculate private saving, taxes, public saving, national saving, and investment, we need to complete Table B4 given the provided information.

Private saving (SPR) is the part of income not spent on consumption or taxes, so it is given by: SPR = Y - C - T. Substituting the given values, SPR = Y - (236 - 0.8Y) - (0.2Y) = 0.2Y + 236 - 236 - 0.8Y = 0.2Y - 0.8Y = -0.6Y.

Taxes (T) are given by: T = tY, where t is the tax rate. Substituting the given values, T = 0.2Y.

Public saving (SPB) is the amount of income not spent on consumption or private saving, so it is given by: SPB = Y - C - SPR. Substituting the given values, SPB = Y - (236 - 0.8Y) - (-0.6Y) = 0.8Y - 236 + 0.6Y = 1.4Y - 236.

National saving (S) is the sum of private saving and public saving, so it is given by: S = SPR + SPB. Substituting the calculated values, S = -0.6Y + 1.4Y - 236 = 0.8Y - 236.

Investment (I) is given by: I = G + X - M, where G is government spending, X is exports, and M is imports. Substituting the given values, I = 80 + 50 - (0.2(236 - 0.8Y + 0.2Y)) = 80 + 50 - (0.2(236 - Y)) = 130 - 0.2(236 - Y).

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User Yariv Nissim
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