In an open economy,Y = C + I + G + NX.From this we may infer that ________.
A)output is greater in an open economy than in a closed economy
B)the condition for goods market equilibrium is that S = I + G + NX
C)net exports can be zero only if the domestic real interest rate is equal to the world real interest rate
D)if saving is greater than zero,NX cannot be zero
E)none of the above

Question

Quizplus · Accepted Answer

The equation Y = C + I + G + NX simply describes the components of GDP in an open economy, where Y is GDP, C is consumption, I is investment, G is government spending, and NX is net exports. It does not inherently imply any of the specific conditions or comparisons listed in the options A through D.

In an Open Economy,Y = C + I + G