Scenario 14-1 Consider the Following Data for a Closed Economy

question 229

Multiple Choice

Scenario 14-1
Consider the following data for a closed economy:
Y = $12 trillion
C = $8 trillion
I = $2 trillion
G = $2 trillion
TR = $2 trillion
T = $3 trillion
-Refer to Scenario 14-1.Based on the information above,what is the level of public saving?

• A) $0
• B) $1 trillion
• C) $2 trillion
• D) negative $1 trillion (a deficit of $1 trillion)

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Definitions:

Cash Basis

An accounting method where revenue and expenses are recognized only when cash is received or paid.

Revenues

The total amount of money received by a company from its business activities, such as sales of products or services, before any deductions.

Revenue Recognition Principle

An accounting principle that determines the specific conditions under which revenue is recognized and recorded.

Unearned Revenues

Money received by a company for a service or product that has yet to be delivered or provided.