For the Kingdom of Wakanda, which is a closed economy, total output is equal to $30 billion and consumption equals $15 billion. The Wakandan government spends $5 billion and has a budget surplus of $1 billion.

1. Find government saving, taxes, private saving and national saving. Please show clearly how you calculated your final answers, and box/circle your final answers (in billions of dollars) with proper labels (e.g. T = $x billion ).

I tried to complete number 1 and this is what I have:

Government Saving (Sg) = T - G

Sg = $1 - $5

Government Saving = -$4 billion

Taxes (T) = tax - transfer payments

T = $5 - $4

Taxes (T) = $1 billion

Private Saving (Sp) = Y - T - C

Sp = $30 - $1 - $15

Private Saving (Sp) = $14 billion

National Saving (S) = (Y - T - C) + (T - G)

S = $14 + (-$4)

National Saving (S) = $10 billion

2. Suppose now the Wakandan government cuts taxes by $1 billion. Assume that total output, initial consumption, and government spending are as specified previously. Determine the new values of taxes, consumption, government saving, private saving, and national saving if Wakandan consumers save 1/2 of the tax cut and spend the other 1/2. Please show clearly how you calculated your final answers, and box/circle your final answers (in billions of dollars) with proper labels (e.g. T = $x billion).

I figured out the taxes for this but I don't understand how to find the new consumption for this.

Here's what I have so far for #2:

Taxes = $0

Taxes = $1 billion - $1 billion = $0

Taxes = $0