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Thank you for visiting In an open economy suppose that GDP is 12 trillion Consumption is 8 trillion government spending is 2 trillion and taxes are 0 5 trillion. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!

In an open economy, suppose that GDP is $12 trillion. Consumption is $8 trillion, government spending is $2 trillion, and taxes are $0.5 trillion. Exports are $1 trillion, and imports are $3 trillion.

How much is national savings?

Answer :

Final answer:

In an open economy with a GDP of $12 trillion, consumption of $8 trillion, government spending of $2 trillion, and taxes of $0.5 trillion, the national savings is $1.5 trillion.

Explanation:

In an open economy, the national savings can be calculated by subtracting consumption, government spending, and taxes from GDP.

Given that GDP is $12 trillion, consumption is $8 trillion, government spending is $2 trillion, and taxes are $0.5 trillion, we can calculate national savings as follows:

National Savings = GDP - Consumption - Government Spending - Taxes

= $12 trillion - $8 trillion - $2 trillion - $0.5 trillion

= $1.5 trillion

Therefore, the national savings in this open economy is $1.5 trillion.

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