In an open economy,gross domestic product equals $2,450 billion,consumption expenditure equals $1,390 billion,government expenditure equals $325 billion,investment equals $510 and net capital outflow equals $225 billion.What is national saving?
A)$225 billion
B)$510 billion
C)$735 billion
D)$1,390 billion

Question

Quizplus · Accepted Answer

In an open economy, the national saving is equal to the sum of domestic investment and net capital outflow. 
Therefore, 
National Saving = Investment + Net Capital Outflow 
= $510 billion + (-$225 billion) [as net capital outflow is negative in this case] 
= $285 billion 
Hence, the national saving is $735 billion ($1,390 billion - $325 billion - $510 billion).

In an Open Economy,gross Domestic Product Equals $2,450 Billion,consumption Expenditure