The national income accounts identity, for an open economy, is:
A) Y = C + I + G - NX.
B) Y = C + I + G + NX.
C) Y = C + I + G.
D) Y = C + I - G.

Question

Quizplus · Accepted Answer

The national income accounts identity for an open economy includes net exports (NX), which are added to consumption (C), investment (I), and government spending (G). Therefore, the correct equation is Y = C + I + G + NX.

The National Income Accounts Identity, for an Open Economy, Is