Question

Consider the following data for a closed economy:Y = $12 trillionC = $8 trillionI= $2 trillionG = $2 trillionTR = $2 trillionT = $3 trillionRefer to Scenario 10-1. Based on the information above, what is the level of private saving in the economy?

A) $3 trillion
B) $4 trillion
C) $5 trillion
D) $8 trillion

Answer 1

The level of private saving in the economy is $1 trillion.

Step-by-step explanation:

The level of private saving in the economy can be calculated by subtracting consumption (C) and taxes (T) from income (Y). Private saving (S) = Y - C - T. Based on the given information, we can calculate:

S = 12 trillion - 8 trillion - 3 trillion = 1 trillion

Therefore, the level of private saving in the economy is $1 trillion. None of the answer choices provided match this amount, so it seems that none of the options given accurately represent the level of private saving.