Question

• Total Output: R 30
• Total Income: R 30
• Consumption: R 22
• Government Spending: R 6
• Total tax revenue: R 5.5
• Transfer payments: R 1.5
Use the above data to calculate:
a. disposable income, savings and net taxes.
b. Is the government running a budget surplus, budget deficit, or balanced budget? Demonstrate.
c. Determine planned investment. (note that investment is equal to the sum of private and public saving)

Answer 1

O=R30

I=R30

C=R22

G=R6

Tr=R5.5

t=R1.5

a). disposable income,$Y=C+I+G$

Y=R22+R30+R6=R58

Savings, $S=I$

S=R30

Net taxes,$T=I-t-Tr$

T=R30-R1.5-R5.5=R23

b). The government running a Budget deficit.

Tr<G

c).  planned investment,$pI=S=I$ =R30