Saudi Electronic UniversityECON 201 Assume we have a closed economy, the data you go over it on discussion 1 show the following information for the fourth quarter of 2020 (assume export = import = net export = 0): ·       National income (excluding net export) = 534,973,000,000 SAR

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Saudi Electronic UniversityECON 201

Assume we have a closed economy, the data you go over it on discussion 1 show the following information for the fourth quarter of 2020 (assume export = import = net export = 0):

·       National income (excluding net export) = 534,973,000,000 SAR.

·       Consumption equal 225,761,000,000 SAR.

·       Government expenditures equal 143,387,000,000 SAR.

Assume that the consumption tax rate is 15% (Value Added Tax) and investment tax is 20%. Solve for the following (parts a to e) if Saudi Arabia is considered a closed economy:

a-    Tax revenue Hint, there are two types of tax; sales tax (VAT) and capital or investment. First, calculate investment to find tax revenue from investment. Add these two together.

b-   Investment.

c-    Private saving.

d-   Public saving and what kind of budget does Saudi Arabia has.

e-    National saving.

f-     On a few words; explain how the government could increase investment level using fiscal polic