National savings must equal
A) I + NX + NFP.
B) I - NX - NFP.
C) Y - NFP + C + G.
D) Yd - C.
E) T - TR - INT - G.

Question

Quizplus · Accepted Answer

National savings, which is the difference between national income and consumption, can be calculated using the equation S = Y - C. However, this equation can also be written as S = I + NX + NFP, where I is investment, NX is net exports, and NFP is net foreign investment income. Therefore, national savings must equal I + NX + NFP (Choice A).

National Savings Must Equal