In a closed economy,national saving is
A)usually greater than investment.
B)equal to investment.
C)usually less than investment because of the leakage of taxes.
D)always less than investment.

Question

Quizplus · Accepted Answer

In a closed economy, national saving is equal to investment. This is because any income not spent on consumption (saving) is either invested domestically or goes towards buying foreign assets (net exports). Therefore, national saving equals domestic investment plus net exports, which in a closed economy means national saving equals investment.

In a Closed Economy,national Saving Is