In a closed economy, investment is always equal to saving regardless of where the saving came from - public or private sources.

Question

Quizplus · Accepted Answer

In a closed economy, there is no foreign trade and all income that is not spent on consumption is saved. Therefore, all saving in the economy is available for investment, and investment must be equal to saving. It does not matter whether saving comes from public or private sources as in both cases it contributes to the overall saving in the economy.

In a Closed Economy, Investment Is Always Equal to Saving