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:

PERT

Project Evaluation and Review Technique, a project management tool used to plan, schedule, and control complex tasks.

Non-Routine Projects

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The contribution margin represents the difference between a company's sales revenue and its variable costs. It is used to assess how much revenue contributes to covering fixed costs and generating profit.

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An economic computation identifying the moment when income matches the expenses involved in generating that income.