Look at this question suppose y 200 c 140 g 25 x-m -5

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Look at this question: "Suppose Y = $200, C = $140, G = $25, x-m = -5, and T = $25. What is Sp? What is I?" Here is the answer:

Yd = Y - T | C + Sp = Y - T | Sp = Y - T - C
Sp = Y - C - T = 200 - 25 - 140 = $35
I = Sp + (T - G) + (x-m) = $35
I = $35 + 0 - 5 = $30

I got this question wrong because I never would have said
I = Sp + (T - G) + (x-m)

I would have said
I = Sp + Sb + (T - G) + (x-m)
where Sb represents undistributed profits by the business sector

Why is Sb omitted?

Reference no: EM13379293

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