What would be the size of Investment (I) as per National Income Accounting Identity in an open economy,…
From the open-economy national income accounting identity \(Y = C + I + G + NX\) and disposable income \(Y - T = C + S\), subtracting yields the sectoral balances identity…
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What would be the size of Investment (I) as per National Income Accounting Identity in an open economy, if Budget Deficit (BD) = 150, Net Exports (NX) = –100 and Private Savings (S) = 1000 ?
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Correct answer B
From the open-economy national income accounting identity and disposable income , subtracting yields the sectoral balances identity . Substituting private savings , budget deficit , and net exports gives , so .
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RPSC Assistant Professor (College Education)