Consider a closed economy with national saving of $2 trillion, consumption of $16 trillion, and government purchases of $5 trillion. What the economy's is GDP?

In a closed economy, the Gross Domestic Product (GDP) is the sum of consumption, investment, and government purchases.

Given that the national saving is $2 trillion, consumption is$16 trillion, and government purchases are $5 trillion, we can use the identity that in a closed economy, national saving equals investment.

So, the investment in this economy is $2 trillion (equal to national saving).

Now, we can calculate the GDP using the formula:

GDP = Consumption + Investment + Government Purchases

Substituting the given values into the formula, we get:

GDP = $16 trillion (Consumption) +$2 trillion (Investment) + $5 trillion (Government Purchases)

So, the GDP of the economy is $23 trillion.