High School

Thank you for visiting Assume a closed economy in which GDP is 20 trillion consumption spending is 16 trillion and government spending is 2 trillion If the government imposes. 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!

Assume a closed economy in which GDP is $20 trillion, consumption spending is $16 trillion, and government spending is $2 trillion. If the government imposes taxes of $2 trillion, what is the level of savings in the economy?

A) $2 trillion
B) $4 trillion
C) $6 trillion
D) $8 trillion

Answer :

Final answer:

In a closed economy, the level of savings is equal to the Investment, which in this case, given the parameters of GDP, Consumption, and Government spending, results in a saving of $2 trillion.

Explanation:

The question is regarding the calculation of savings in an economy. In a closed economy, the Gross Domestic Product (GDP) can be expressed as the sum of Consumption (C), Investment (I), and Government Spending (G), as imports and exports are not considered.

In this case, the GDP is $20 trillion, consumption spending is $16 trillion, and government spending is $2 trillion.

This means that Investment = GDP - Consumption - Government spending = $20 trillion - $16 trillion - $2 trillion = $2 trillion. Investment in a closed economy is equal to the Savings (S). So, the level of savings in this economy is $2 trillion.

Learn more about Economy and Savings here:

https://brainly.com/question/32236471

#SPJ11

Thank you for reading the article Assume a closed economy in which GDP is 20 trillion consumption spending is 16 trillion and government spending is 2 trillion If the government imposes. We hope the information provided is useful and helps you understand this topic better. Feel free to explore more helpful content on our website!

Rewritten by : Jeany

Other Questions