Consider the following data for a closed​ economy: Y​ = ​$ trillion C​ = ​$ trillion I ​= ​$ trillion TR​ = ​$ trillion T​ = ​$ trillion Use the data to calculate the following. ​(Enter your responses as​ integers.) a. Private​ saving: ​$ nothing trillion. b. Public​ saving: ​$ nothing trillion. c. Government​ purchases: ​$ nothing trillion. d. The government budget balance is ​$ nothing trillion and as a result the government budget is in ▼ surplus balance deficit .

a. Private​ saving = $3 trillion

b. Public​ saving = $3 trillion

c. G = Government​ purchases = $0

d. The government budget balance is ​$3 trillion and as a result the government budget is in surplus.

Explanation:

Note: This question is not complete as the data are omitted. The complete question is therefore provided before answering the question as follows:

Consider the following data for a closed​ economy:

Y​ = ​$12 trillion

C​ = ​$6 trillion

I ​= ​$3 trillion

TR​ = ​$1 trillion

T​ = ​$4 trillion

Use the data to calculate the following. ​(Enter your responses as​ integers.) a. Private​ saving: ​$ nothing trillion.

b. Public​ saving: ​$ nothing trillion.

c. Government​ purchases: ​$ nothing trillion.

d. The government budget balance is ​$ nothing trillion and as a result the government budget is in ▼ surplus balance deficit .

The explanation of the answer is now given as follows:

Note that:

Y = national income (GDP) = ​$12 trillion

C = consumption = ​$6 trillion

I = investment = ​$3 trillion

TR​ = ​Transfers paid by the government to the consumers = $1 trillion

T​ = Taxes paid by consumers = ​$4 trillion

a. Private​ saving: ​$ nothing trillion.

Private​ saving = Y − T + TR − C = $12 trillion - ​$4 trillion + ​$1 trillion - $6 trillion = $3 trillion

b. Public​ saving: ​$ nothing trillion.

Let G = Government​ purchases

Therefore, we have:

Public​ saving = T − G − TR = $4 trillion - $0 - $1 trillion = $3 trillion

c. Government​ purchases: ​$ nothing trillion.

National saving = Private​ saving + Public​ saving = $3 trillion + $3 trillion = $6 trillion

The Government​ purchases (G) can therefore be derived using the following equation:

National saving = Y - C - G (1)

Substituting the relevant values into equation (1) and solve for G, we have:

$6 trillion = ​$12 trillion - ​$6 trillion - G

G = $12 trillion - ​$6 trillion - $6 trillion

G = $0

d. The government budget balance is ​$ nothing trillion and as a result the government budget is in ▼ surplus balance deficit .

In economics, Public​ saving is also know as Budget surplus. Therefore, we have:

Public​ saving = Budget surplus = $3 trillion

Therefore, the government budget balance is ​$3 trillion and as a result the government budget is in surplus.

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