Which of the following statements is correct?
A)The total income minus consumption and government purchases is called private saving.
B)The sum of private saving and national saving is called public saving.
C)For a closed economy, the sum of consumption, national saving, and taxes must equal GDP.
D)For a closed economy, the sum of private saving and public saving must equal investment.

Question

Quizplus · Accepted Answer

In a closed economy, the national saving is the sum of private saving (income that households have saved after paying for taxes and consumption) and public saving (the amount of tax revenues that the government has left after paying for its spending). This total saving in the economy must be equal to the total investment, as per the national income identity for a closed economy. Hence, statement D is correct.

Which of the Following Statements Is Correct