In an open economy, private saving, , is equal to

Name: In an open economy, private saving, , is equal to
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Question

In an open economy, private saving,  , is equal to

Quizplus · Accepted Answer

In an open economy, private saving (S) is equal to investment (I) plus current account balance (CA), which equals exports minus imports, plus the difference between government spending (G) and taxes (T) (G-T): S = I + CA + (G-T). This equation is derived from the national income accounting identity, where total output must equal total income, which is divided into consumption, saving, and taxes.

In an Open Economy, Private Saving, , Is Equal