An economy in equilibrium has a trade deficit of $20bn and a budget surplus of $20bn.Investment spending is $50bn.What is the total saving?A $5bn B $10bn C $15bn D $20bn

To answer this question, we need to understand the basic macroeconomic identity which states that in an open economy, total output (Y) is the sum of consumption (C), investment (I), government spending (G), and net exports (NX), which is exports minus imports.

This can be written as: Y = C + I + G + NX

However, in an economy in equilibrium, total output is equal to the total income. Therefore, we can also say that Y is the sum of private savings (S), taxes (T) minus transfers, and imports (M) minus exports.

This can be written as: Y = C + S + T + M

In this case, we know that the economy has a trade deficit of $20bn, which means that imports are greater than exports by$20bn. We also know that the economy has a budget surplus of $20bn, which means that taxes are greater than government spending by$20bn.

Given that investment spending is $50bn, we can use the equation Y = C + I + G + NX to find out the total savings.

Rearranging the equation, we get S = I + (G - T) + (X - M)

Substituting the given values, we get S = $50bn + (-$20bn) + (-$20bn) =$10bn

Therefore, the total savings in the economy is $10bn. So, the correct answer is B$10bn.