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GDP is $12 trillion this year in a closed economy. Consumption is $8 trillion and government spending is $2 trillion. Taxes are $0.5 trillion. How much is private saving? $4 trillion $2.5 trillion $3.5 trillion –$0.5 trillion

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hyderali230

Answer:

$3.5 trillion

Explanation:

GDP is the monetary value of all the goods manufactured and services made within the country for a specific period of time. It shows the economic condition of a country.

As per given data

Total GDP = $12 trillion

Consumption = $8 trillion

Govt. Spending = $2 trillion

Taxes = $0.5 trillion

Disposable income = GDP - Taxes = 12 Trillion - 0.5 trillion = $11.5 trillion

Private saving = Disposable Income - consumption = $11.5 trillion - 8 trillion = 3.5 trillion