In a closed economy,national saving equals
A)investment.
B)income minus the sum of consumption and government purchases.
C)private saving plus public saving.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

All of the options are correct. 
- Option A: Investment is equal to national saving in a closed economy because there are no foreign transactions, so any saving in the economy will be used to fund domestic investment. 
- Option B: National saving can be calculated as the difference between national income and national expenditure. Consumption and government purchases are components of national expenditure. Hence, saving equals income minus the sum of consumption and government purchases. 
- Option C: National saving consists of both private saving (saving by households and firms) and public saving (government saving). Hence, national saving can be expressed as the sum of private and public saving.

In a Closed Economy,national Saving Equals