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Answer :
Final answer:
In an imaginary, closed economy with a GDP of $5 trillion, consumption of $3.1 trillion and government spending of $0.7 trillion, the national saving, calculated using the formula S = Y - C - G, is $1.2 trillion.
Explanation:
In the given scenario, we have to calculate the national saving for an imaginary, closed economy. The formula for national saving is S = Y - C - G where S represents national saving, Y is the gross domestic product (GDP), C is consumption, and G is government spending. Given in the problem, GDP, consumption, and government spending are $5 trillion, $3.1 trillion, and $0.7 trillion respectively. Substituting those figures into the formula, we get S = $5 trillion - $3.1 trillion - $0.7 trillion which equals $1.2 trillion. Therefore, the national saving for this economy is $1.2 trillion.
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Thank you for reading the article Refer to Scenario 26 2 Assume the following information for an imaginary closed economy GDP 5 trillion Consumption 3 1 trillion Government purchases 0 7. We hope the information provided is useful and helps you understand this topic better. Feel free to explore more helpful content on our website!
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