Which of the following equations is always correct in an open economy?
A)I = Y - C
B)I = S
C)I = S - NCO
D)I = S + NX

Name: Which of the following equations is always correct in an open economy? A)I = Y - C B)I = S C)I = S - NCO D)I = S + NX
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Question

Quizplus · Accepted Answer

In an open economy, investment (I) is equal to savings (S) minus net capital outflow (NCO), which represents the difference between the amount of foreign assets purchased by domestic residents and the amount of domestic assets purchased by foreigners.

Which of the Following Equations Is Always Correct in an Open