To calculate investment, we need to use the formula:
Investment = Saving
Saving = (Income - Expenditure)
Income (Y) = Consumption (C) + Saving (S)
Expenditure (E) = Consumption (C) + Investment (I)
Given:
Q = $1,100 billion (Income)
U = $200 billion (Consumption)
W = $550 billion (Investment + Consumption)
R = $150 billion (Consumption)
Z = $50 billion (Investment)
So, we can find the values of Consumption (C) and Investment (I):
Consumption (C) = Income (Y) - Saving (S)
Consumption (C) = Q - U
C = $1,100 billion - $200 billion
C = $900 billion
Now, we can find the value of Investment (I):
Expenditure (E) = Income (Y)
E = Q
E = $1,100 billion
Expenditure (E) = Consumption (C) + Investment (I)
E = C + I
$1,100 billion = $900 billion + I
I = $1,100 billion - $900 billion
I = $200 billion
Therefore, the investment is $200 billion.
