What equation is the GDP identity in an open economy?
A) Y = C + I + G + NCO
B) NX = - NCO
C) NCO = S - I + NX
D) Y = C + I + G - NX

Question

Quizplus · Accepted Answer

The GDP identity in an open economy is represented by Y = C + I + G + NX, where Y is GDP, C is consumption, I is investment, G is government spending, and NX is net exports (exports minus imports). Choice A is a typo; it should include NX (net exports) instead of NCO (net capital outflow). However, given the options, A is the closest to the correct formula, acknowledging the typo.

What Equation Is the GDP Identity in an Open Economy