For an Open Economy, the Equation Y = C

question 33

Multiple Choice

For an open economy, the equation Y = C + I + G + NX is an identity. If we define national saving, S, as the total income in the economy that is left after paying for consumption and government purchases, then for an open economy, it is true that

• A)S = I.
• B)S = 0.
• C)I = S + NX.
• D)S = I + NX.

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Definitions:

Mean

The average of a set of numbers, calculated by adding all the values together and dividing by the number of values.

Sample Mean

Mean calculated from data for a sample.

Confidence Interval

A set of values, taken from sampled data, that potentially covers the value of an unknown parameter of the population.

Mean Score

The average value calculated by adding all individual scores and dividing by the number of scores.