Which of the following equations most simply represents GDP in a closed economy?
A)Y = C + I + G + NX
B)S = I - G
C)I = Y - C + G
D)Y = C + I + G

Question

Quizplus · Accepted Answer

In a closed economy, there is no net export component (NX) as there are no imports or exports with other countries. Therefore, the equation that most simply represents GDP in a closed economy is Y = C + I + G, where Y is the GDP, C is the consumption, I is the investment, and G is the government expenditure.

Which of the Following Equations Most Simply Represents GDP in a Closed