The uses-of-saving identity says that an economy's private saving is used for
A)investment, interest expenses, and the government budget deficit.
B)investment, the government budget deficit, and the current account.
C)investment, interest expenses, the government budget deficit, and the current account.
D)investment, interest expenses, the government budget deficit, transfer payments, and the current account.

Question

Quizplus · Accepted Answer

The uses-of-saving identity in an economy states that private saving is used for investment, financing the government budget deficit, and funding the current account surplus. This reflects how savings within an economy are allocated towards domestic investment, lending to the government, and investing abroad.

The Uses-Of-Saving Identity Says That an Economy's Private Saving Is