Which of the following statements is not correct about notional accounting identity?
A)S = (Y - T - C) - (T - G)
B)S = Y - C - G
C)S = I
D)Y = C + I + G

Question

Quizplus · Accepted Answer

Statement A is not correct because it incorrectly represents the notional accounting identity. The correct identity should reflect the relationship between savings (S), investment (I), government spending (G), taxes (T), consumption (C), and total income (Y). The correct identities are represented by the other options, showing the relationships between these economic variables. Specifically, option A incorrectly manipulates the terms related to taxes and government spending, leading to a formulation that does not accurately reflect the standard accounting identities in economics.

Which of the Following Statements Is Not Correct About Notional