In class, we learned that saving and investment in physical capital increase the capital per worker and increase labor productivity and derived the saving-investment spending identity to see how investment in physical capital is financed in an economy. Use the saving-investment identity to answer the question below. In an open economy, GDP is $13 trillion this year. Consumption is $9 trillion, and government spending is $2 trillion. Taxes are $0.5 trillion. Exports are $3 trillion, and imports are $5 trillion. Since the national saving is [Select] capital inflow is [Select] spending in the economy will be [Select] . and the net the total investment
In class, we learned that saving and investment in physical capital increase the capital per worker and increase labor productivity and derived the saving-investment spending identity to see how investment in physical capital is financed in an economy. Use the saving-investment identity to answer the question below. In an open economy, GDP is $13 trillion this year. Consumption is $9 trillion, and government spending is $2 trillion. Taxes are $0.5 trillion. Exports are $3 trillion, and imports are $5 trillion. Since the national saving is [Select] capital inflow is [Select] spending in the economy will be [Select] . and the net the total investment
Chapter16: Economic Growth
Section: Chapter Questions
Problem 12E
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