Question

in an economy private savings is 1065, investment is 1346 and the current account balance is negative (-220) how much is govt savings in this economy

Answer 1

Answer:

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Explanation:

Answer 2

Answer:

GS= 61

Explanation: S= 1065

I= 1346

Private Savings S= Y-C-T

Government Savings= T-G (G=Government Expenses)

Government expenditure minus tax revenue (G-T) represents the fiscal balance or public savings(GS).

Current Account Balance CAB= (X−M)

Therefore, CAB = -220= X-M

S-I = (G – T) + (X – M)

1065-1346= -GS -220

-281+220= -GS

-61= -GS

GS= 61