If income is equal to total spending, then in a closed economy, it is equal to:
A) consumption plus investment spending.
B) savings plus investment.
C) savings minus investment.
D) consumption minus investment spending.

Question

Quizplus · Accepted Answer

In a closed economy, there are no international transactions, so income must be equal to total spending. This total spending is composed of consumption spending and investment spending, so income must be equal to consumption plus investment spending.

If Income Is Equal to Total Spending, Then in a Closed