In a closed economy, what does national saving equal?
A) income minus consumption
B) income minus the sum of consumption and government expenditures
C) income minus consumption minus taxes
D) income minus government expenditures

Question

Quizplus · Accepted Answer

National saving is the amount of income that is not consumed or used for government expenditures. Therefore, national saving equals income minus the sum of consumption and government expenditures. Choice A (income minus consumption) only accounts for private saving, not national saving. Choice C (income minus consumption minus taxes) only accounts for public saving, not national saving. Choice D (income minus government expenditures) only accounts for public saving, not national saving.

In a Closed Economy, What Does National Saving Equal