Answer:
$2 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
Budget Balance = Taxes - Govt. Spending = 0.5 trillion - $2 trillion = -1.5 trillion
Investment Spending = Private saving + budget balance = 3.5 trillion - 1.5 trillion = $2 trillion
Answer:
The investment spending is $2 trillion, the last option given in the question.
Explanation:
The formula for GDP for a closed economy is given below:
GDP=C+I+G
where C is the consumption expenditure of the households given as $8 trillion
I is the investment spending in the economy which is unknown
G is government expenditure given as $2 trillion
12 trillion=$8 trillion+I+$2 trillion
12 trillion=10 trillion+I
I=$12 trillion-$10 trillion
I =$2 trillion
The correct answer is $2 trillion , the last option
