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Where Y is GDP, C is consumption, I is investment, T is net taxes and G is government spending, if there is no trade, then private saving equals:Group of answer choicesY - T - CY - C – IY - T – GC + I + G – T

Question

Where Y is GDP, C is consumption, I is investment, T is net taxes and G is government spending, if there is no trade, then private saving equals:Group of answer choicesY - T - CY - C – IY - T – GC + I + G – T

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Solution

The formula for private saving when there is no trade is Y - T - C.

Here's the step by step explanation:

  1. Gross Domestic Product (Y) is the sum of Consumption (C), Investment (I), and Government Spending (G). Since there is no trade, we don't consider exports and imports. So, Y = C + I + G.

  2. Net taxes (T) is the amount the government collects from the economy.

  3. Private saving is what's left of the GDP after we subtract what's consumed (C) and what's paid as net taxes (T).

So, Private Saving = Y - T - C.

This problem has been solved

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