In an open economy where net exports are 5% of GDP, consumption is 60% of GDP, and taxes net of transfers are 30% of total consumption and investment. If government spending equals investment, which of the following statements is true?

A. Private saving is less than 5% of GDP

B. Investment is greater than 20% of GDP

C. Public saving is greater than private saving

D. Public saving is less than 5% of GDP

E. More than one of the options listed is correct

Answer rating: 100% (QA)

GivenNet exports are 5 of GDPConsumption is 60 of GDPTaxes net of transfers are 30 of total consumpt... View the full answer