Answer to Question #304570 in Macroeconomics for ggh

Question

what are the savings and investment when the GDP is $1,000 consumption is $600 taxes are $100 and the government purchases is $200?

Answer 1

GDP = Consumption + Government purchases + Savings and investment + Net exports

Combination of Savings and investment ;

$1,000 = $600 + $200 + savings and investment

$1,000 = $800 + savings and investment

Savings and investment = $1,000 - $800 = $200.