Question

In a small, closed economy, national income (GDP) is $ 350.00 million for the current month. Individuals have spent $ 100.00 million on the consumption of goods and services. They have paid a total of $ 60.00 million in taxes, and the government has spent $ 75.00 million on goods and services this month. Use this information and the national income identity to answer the questions. How much is spent on investment in this economy

Answer 1

Answer:

$175 million

Explanation:

The computation of the amount spent on the investment is shown below:

As we know that

GDP = Consumption + Investment + Government purchase + Net exports

where,

GDP is $350 million

Consumption is $100 million

Government spent = $75 million

So, the investment amount is

$350 million = $100 million + investment + $75 million

So, the investment is $175 million