Which of the following correctly shows the relationship between savings,the government budget balance,and the current account?
A)S + CA = I + (T -G)
B)S + CA = I + (T + G)
C)S + (T - G)= I + CA
D)S + (T + G)= I + CA

Question

Quizplus · Accepted Answer

The equation S + (T - G) = I + CA correctly shows the relationship between savings (S), the government budget balance (T - G), and the current account (CA). This equation states that savings plus the government budget surplus (T - G) equals investment (I) plus the current account surplus (CA).

Which of the Following Correctly Shows the Relationship Between Savings,the