Which equation most simply represents GDP in a closed economy?
A) Y = C + I + G
B) S = I - G
C) I = Y - C + G
D) Y = C + I + G + NX

Question

Quizplus · Accepted Answer

In a closed economy, there are no international transactions/exports or imports (NX=0). Therefore, the simplest equation that represents GDP would be Y = C + I + G, where Y is GDP, C is consumption spending, I is investment spending, and G is government spending.

Which Equation Most Simply Represents GDP in a Closed Economy