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The country of Hykenia does not trade with any other country. Its GDP is $20 billion. Its government collects $4 billion in taxes and pays out $3 billion to households in the form of transfer payments. Consumption equals $15 billion and investment equals $2 billion. What is public saving in Hykenia, and what is the value of the goods and services purchased by the government of Hykenia?

Respuesta :

Myth8

Answer: - $2 billion and $3 billion

Explanation:

Government spending

GDP = C + I + G (X - M)

Since it's a closed economy, there will be no export or import

GDP= C + I + G

Where GDP is $20 billion

Investment (I) is $2 billion

G is Government spending

GDP= C + I + G

20=15 + 2 + G

20= 17 + G

Make G the subject of the formula

G= 20 - 17

G= $3 billion

In a closed economy, public saving is known as budget surplus/deficit ie (T-G-TR)

Where T is tax

G is Government expenditures on goods and services

TR is Transfer payments

Public saving= T - G - TR

Public saving=$4bn - $3bn - $3bn

Public saving= - $2 billion.

It's a budget deficit.

The public saving in Hykenia is $-2 billion and the value of goods and services purchased by the government is $3 billion.

What is public savings and the value of government purchases?

When an economy is closed, it means that it does not trade with other countries. Thus, the equation that would be used to determine its gross domestic product using the expenditure method is:

consumer spending + investment + government spending

Government spending = $20 - $15 - $2 = $3 billion

Public savings = taxes - government spending - transfer payments

$4 - $3 - $3 = $-2 billion

To learn more about GDP, please check: https://brainly.com/question/15225458