Gce Model Questions Vol1 2024 Economics Question 29

Practice objective / multiple choice question 29 from the 2024 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2024 Economics Objective / Multiple Choice Medium Difficulty
Question 29 GCE_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • objective

In a closed economy the following relationships hold: consumption \(C = 0.6(Y - T) + 50\), investment \(I = 30\), government spending \(G = 80\), taxes \(T = 0.2Y\) and net exports \(NX = -10\). (a) Find the equilibrium national income \(Y\). (b) Compute private saving, public saving and verify that total saving equals \(I + NX\).

Answer Options

A. Equilibrium Y ≈ 320; total saving = 30 (private ≈ 55, public ≈ -25)
B. Equilibrium Y ≈ 260; total saving = 25 (private ≈ 50, public ≈ -25)
Correct Answer C. Equilibrium Y ≈ 288.5; total saving = 20 (private ≈ 42.3, public ≈ -22.3)
D. Equilibrium Y ≈ 300; total saving = 15 (private ≈ 45, public ≈ -30)
Correct Answer
C
Correct Option:
Equilibrium Y ≈ 288.5; total saving = 20 (private ≈ 42.3, public ≈ -22.3)

About This Question

This is Gce Model Questions Vol1 2024 Economics Question 29. It is one of the objective questions from the 2024 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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