N4

Suppose GDP is $9000 billion, net taxes are $1,200 billion, private saving is $1,800 billion and public saving is --$400 billion. Assuming this economy is closed answer the following (and provide brief details for your calculations):

a) calculate consumption.

b) calculate government purchases.

c) calculate national saving.

d) calculate investment.

e) Did the government have a budget deficit or a surplus? Explain briefly.

f) If total taxes incoming to the government were $1,900 billion, what were total government outlays or payments?