In a closed economy, the values for gdp, consumption spending, investment spending, transfer payments, and taxes are as follows: y = $12 trillion c = $9 trillion i = $3 trillion tr = $2 trillion t = $3 trillion using the information above, what is the value of private saving and public saving? a. private saving = $1 trillion and public saving = $2 trillion. b. private saving = $3 trillion and public saving = $9 trillion. c. private saving = $2 trillion and public saving = $1 trillion. d. private saving = $9 trillion and public saving = $3 trillion.

Option (C) is correct.

Explanation:

National Savings is divided into two parts, private savings and public savings.

Private Savings = GDP - Taxes + Transfer payments - Consumption Spending

                         = Y - T + TR - C

                         = 12 - 3 + 2 - 9

                          = $ 2 trillion

Public Savings  = Taxes - Government Spending - Transfer payments

                           = 3 - 0 - 2

                           = $1 trillion

∴ Option (C) is correct.  

Private saving = ​$2 trillion and public saving = ​$1 trillion.

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