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Given the following data:

- [tex]Y = \$12[/tex] trillion
- [tex]C = \$7[/tex] trillion
- [tex]I = \$1[/tex] trillion
- [tex]TR = \$1[/tex] trillion
- [tex]T = \$4[/tex] trillion

Use these data to calculate:

a. Private saving: $ _______ trillion. (Round your response to the nearest trillion dollars.)

b. Public saving: $ _______ trillion. (Round your response to the nearest trillion dollars.)

c. Government purchases: $ _______ trillion. (Round your response to the nearest trillion dollars.)

d. The government budget balance is $ _______ trillion, and as a result, the government budget is in _______. (Round your response to the nearest trillion dollars.)

Answer :

Private saving: $5 trillion

Public saving: $0 trillion

Government purchases: $5 trillion

The government budget balance is -$2 trillion, indicating a budget deficit.

To calculate private saving, we subtract consumption (C) from disposable income (Y - T) and add transfers (TR):

Private saving = (Y - T) - C + TR

Private saving = ($12 trillion - $4 trillion) - $7 trillion + $1 trillion

Private saving = $8 trillion - $7 trillion + $1 trillion

Private saving = $2 trillion

Public saving is the difference between government revenue (T) and government expenditure (government purchases):

Public saving = T - government purchases

Public saving = $4 trillion - $5 trillion

Public saving = -$1 trillion

Government purchases represent the total amount spent by the government:

Government purchases = $5 trillion

The government budget balance is the difference between government revenue and government expenditure:

Government budget balance = T - government purchases

Government budget balance = $4 trillion - $5 trillion

Government budget balance = -$1 trillion

The negative budget balance indicates a budget deficit, meaning that government expenditure exceeds government revenue.

Learn more about budget deficit here:

https://brainly.com/question/32410393

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