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

Question

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

Quizplus · Accepted Answer

Private saving is equal to disposable income (YD) minus consumption (C): S = YD - C. 
In an open economy, national saving (S) is equal to investment (I) plus the current account (CA) balance (exports minus imports): S = I + CA. 
And national saving (S) is equal to the sum of private saving (Sp) and public saving (Sg): S = Sp + Sg, where public saving is equal to government spending (G) minus taxes (T): Sg = (G - T). 
Then, we can substitute Sp = YD - C into the equation for national saving and substitute Sg = (G - T) into the equation for public saving: 
Sp + Sg = I + CA 
(YD - C) + (G - T) = I + CA 
Simplifying, we get: 
(YD - C) = I + CA - (G - T) 
Therefore, private saving (Sp) is equal to I + CA - (G - T), which is choice C.

In an Open Economy,private Saving, ,Is Equal to