The notation is Y = GNP = national income
C = consumption
I = private investment
G = government spending
X = exports
M = imports
T = taxes
Private savings,S,is defined as S = Y − C − T.Which of the following is also accurate?
A)S = C + I + G + X − M − C − T
B)S = C + I + G + X
C)S = C + X − M − C − T
D)S = C + G + X − M − C − T

Question

Quizplus · Accepted Answer

S = Y - C - T, and since Y = C + I + G + X - M, substituting Y in the savings equation gives S = (C + I + G + X - M) - C - T, which matches choice A.

The Notation Is Y = GNP = National Income