The income-expenditure identity says that

Question

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The income-expenditure identity (or national income accounting identity) is expressed as: Y = C + I + G + NX, where Y is the total output (income) of an economy, C is consumption, I is investment, G is government spending, and NX is net exports (exports minus imports). This identity demonstrates that total output (income) is equal to the total expenditures (consumption, investment, government spending, and net exports) in the economy. Option A is incorrect as it does not include investment or net exports, while option B is incorrect as it does not include net exports. Option D is incorrect as it includes current account (CA) which is a broader concept than net exports.

The Income-Expenditure Identity Says That