In the equation $( Y - T - C ) + ( T - G ) + ( \mathrm { IM } - \mathrm { EX } ) = L$ , the term $( Y - T - C )$ Is ________ and $( T - G )$ Is ________.
A) aggregate saving; tax revenues
B) private saving; government saving
C) foreign saving; private saving
D) the government debt; investment
E) the trade balance; the financial account

Question

Quizplus · Accepted Answer

The term $( Y - T - C )$ represents private saving, which is income (Y) minus taxes (T) and consumption (C). The term $( T - G )$ represents government saving, which is taxes (T) minus government spending (G).

In the Equation (Y−T−C)+(T−G)+(IM−EX)=L( Y - T - C ) + ( T - G ) + ( \mathrm { IM } - \mathrm { EX } ) = L(Y−T−C)+(T−G)+(IM−EX)=L

In the Equation $( Y - T - C ) + ( T - G ) + ( \mathrm { IM } - \mathrm { EX } ) = L$