Scenario 1. Assume the following information for an imaginary, closed economy. GDP-$110,000; consumption - $70,000; private saving-$8,000, national saving-$12,000. Refer to Scenario 1. For this economy, government purchases amount to $12,000. $18,000, $28,000. $40,000.

Scenario 1. Assume the following information for an imaginary, closed economy. GDP-$110,000; consumption - $70,000; private saving-$8,000, national saving-$12,000. Refer to Scenario 1. For this economy, government purchases amount to $12,000. $18,000, $28,000. $40,000.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Savings,investment And The Financial System

Section: Chapter Questions

Problem 4PA

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Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.

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