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GDPAccounting,savingsandinvestment:Consideracountrywithagovernmentbudgetdeficitof60billion,andatradedeficitof80billion.Thiscountryhasgovernmentrevenueof260billion.Netfactorpayments(NFP)arezero,sothetradebalance equalsthecurrentaccount.Householdconsumptionis460billionandhousehold savingis20billionandbusiness savingsis60billion. Thiseconomyexperiencesadebtcrisis,sothatthegovernmentimplementsanausterityprogram.Thegovernmentraisestaxes,cutsspendingandgovernmentemployment,andannouncesplansforadditionaltaxincreasesandspendingcutsinthefuture. Draw the Savings-Investment Graph

GDPAccounting,savingsandinvestment:Consideracountrywithagovernmentbudgetdeficitof60billion,andatradedeficitof80billion.Thiscountryhasgovernmentrevenueof260billion.Netfactorpayments(NFP)arezero,sothetradebalance equalsthecurrentaccount.Householdconsumptionis460billionandhousehold savingis20billionandbusiness savingsis60billion.

Thiseconomyexperiencesadebtcrisis,sothatthegovernmentimplementsanausterityprogram.Thegovernmentraisestaxes,cutsspendingandgovernmentemployment,andannouncesplansforadditionaltaxincreasesandspendingcutsinthefuture.

Draw the Savings-Investment Graph

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