Assume that, government of Country X, which had a balanced budged now increased their spending

while the taxes are constant.

GDP = 1,000 million BDT G = 100 million BDT C = 850 million BDT

X = 100 million BDT T = 50 million BDT M = 125 million BDT

A) What is the level of investment spending and private savings? (2)

B) What are amounts of budget balance (deficit/surplus) and net capital inflow? [Hint: net capital

inflow equals the value of imports (M) minus the value of exports (X)]