Based on the following information, calculate public saving, net foreign investment, and national income
Private saving = $83 billion
Exports = $125 billion
Imports = $130 billion
Consumption = $200 billion
Private investment = $56 billion
Government purchases = $38 billion
Based on the macroeconomic equation for national income, Y = C + I + G + NX = 200 + 56 + 38 + -5 = $289 billion. Since net exports are -$5 billion, net foreign investment must also be -$5 billion. According to the saving and investment equation, national saving = domestic investment plus net foreign investment. Based on the numbers provided, domestic investment plus net foreign investment = $56 billion + -$5 billion = $51 billion. This $51 billion comes from private and public saving. Since private saving is $83 billion, it must be the case that public saving is -$32 billion, so the government is running a budget deficit of $32 billion.
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If UIP holds and the home currency is expected to appreciate by 4%, then the home interest rate is:
a. 6% b. 5% c. 4% d. Not enough information is provided to answer the question
The construction of the economy's marginal social benefit curve for a public good reflects the fact that
A) all the individuals can consume the same unit of the good. B) more than one supplier can provide the good. C) the same unit of the good cannot be simultaneously shared by more than one person at a time. D) the government can supply a public good at a lower cost than can a private supplier.