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Suppose GDP is $8 trillion, taxes are $1.5 trillion, private saving is $0.5 trillion, and public saving is $0.2 trillion. Assuming this economy is closed, consumption is $ trillion, government purchases are $ trillion, national saving is $ trillion, and investment is $ trillion.

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Suppose a country had a smaller increase in debt in 2006 than it had in 2005. Then other things the same, we’d expect ()

A. lower interest rates and investment in 2006 than in 2005.
B. lower interest rates and greater investment in 2006 than in 2005.
C. higher interest rates and greater investment in 2006 than in 2005.
D. higher interest rates and lower investment in 2006 than in 2005.

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In a certain economy in 2005, GDP amounted to $5,000; consumption amounted to $3,000; government purchases were equal to investment; and the value of imports exceeded the value of exports by $200. It follows that government purchases amounted to ()

A. $900.
B. $1,100.
C. $1,250.
D. $1,325.

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In a small closed economy, investment is $20 billion and private saving is $22 billion. What is public saving and national saving? ()

A. $24 billion and $2 billion
B. $20 billion and -$2 billion
C. $2 billion and $24 billion
D. -$2 billion and $20 billion

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In a certain economy in 2005, GDP amounted to $5,000; consumption amounted to $3,000; government purchases were equal to investment; and the value of imports exceeded the value of exports by $200. It follows that government purchases amounted to () 2.

A. $900. 3.
B. $1,100. 4.
C. $1,250. 5.
D. $1,325.

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