The income-expenditure identity for an open economy is:

Question

Quizplus · Accepted Answer

The income-expenditure identity for an open economy is Y = C + I + G + NX, where Y is the national income, C is total consumption, I is total investment, G is total government spending, and NX is net exports (exports minus imports). This equation implies that the total output or income (Y) is equal to the sum of consumption (C), investment (I), government spending (G), and net exports (NX).

The Income-Expenditure Identity for an Open Economy Is