If CAB = current account balance, I = private sector investment, S = national saving and NX = net exports, then:
A)CAB + I = S.
B)CAB + NX = S.
C)I = CAB - S.
D)CAB = I + NX.

Question

Quizplus · Accepted Answer

The equation CAB + I = S represents the national income accounting identity, which states that the sum of the current account balance and private sector investment equals national saving.

If CAB = Current Account Balance, I = Private Sector