For the goods market to be in equilibrium in a closed economy,which of the following must be TRUE?
A) Y = S + I + G
B) S + I = C + G
C) S + G = Y + C
D) S = I

Question

Quizplus · Accepted Answer

In a closed economy, the goods market is in equilibrium when the amount of savings (S) equals the amount of investment (I). This is because investment is financed by savings in a closed economy, as there are no international capital flows. Therefore, S = I is the condition for equilibrium in the goods market.

For the Goods Market to Be in Equilibrium in a Closed