Which of the following equations is correct?
A)Y = C + I + G + NCO
B)NX = NCO
C)NCO = S - I
D)All of the above are correct.

Question

Quizplus · Accepted Answer

A) Y = C + I + G + NX is the equation for the national income accounting identity, in which Y represents total output, C represents consumption, I represents investment, G represents government spending, and NX represents net exports (exports - imports).
B) NX = NCO is an identity that states that net exports equals net capital outflow (NCO), which is the difference between capital inflows and capital outflows.
C) NCO = S - I is the equation that relates net capital outflow to national saving (S) and investment (I). Specifically, it states that NCO equals the difference between saving and investment.

All three equations are correct and fundamental to understanding macroeconomics.

Which of the Following Equations Is Correct