Which of the following expressions must be equal to national saving for a closed economy?
A)Y - I - G - NX
B)Y - C - G
C)Y - I - C
D)G + C - Y

Question

Quizplus · Accepted Answer

National saving in a closed economy is equal to the income (Y) minus consumption (C) minus government spending (G). Therefore, the expression Y - C - G must be equal to national saving. Option A includes net exports (NX), which is not a part of national saving for a closed economy, and option C only includes investment (I) and consumption (C), excluding government spending (G). Option D subtracts income (Y) from government spending (G) and consumption (C), which is not the correct formula for national saving.

Which of the Following Expressions Must Be Equal to National