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Where Y is GDP, C is consumption, I is investment, G is government spending, and there...

Where Y is GDP, C is consumption, I is investment, G is government spending, and there is no international trade, national saving equals: A) Y – C – I. B) C + I + G. C) Y – C – G. D) Y + C + G.
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Answer #1

Answer: option C

National saving (S) would be as below:

S = Y – C – G

It is so because S must be equal to I where there is no foreign trade, means a closed economy. Since the components of Y are C, I, and G, by the use of above equation it is established that there is a equality of S and I; (S = I). Therefore, the equation is tallying.

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