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 can be used to fund investment (I) or to finance the trade surplus (CA) and/or the government budget deficit/surplus (G-T). Therefore, in an open economy, private saving (S) is equal to investment (I) plus the current account balance (CA) plus the government budget balance (G-T). This can be written as S=I+CA+(G-T). Therefore, answer choice C is correct.

In an Open Economy, Private Saving, , Is Equal