Consider the expressions YTC and TG. which of the following statements is correct? a. Each of them is equal to public savings. B The first is public savings; the second is private savings. vs. The first is private savings; the second is public savings. D. Each of them is equal to private savings.
Answer 1
Answer:- Option (c) is the correct answer.
Explanation:- In
economy, a savings-investment equilibrium is a
national savings and investment. It is obtained from the income
identify.
The national income identity is;
Y=C+I+G+ (XM)
Where, Y= GDP, C= National
consumption, I=Investment, G=Government expenditure,X=Export and M
= import
It can be rewritten as;
(YTC)+(TG)-I=(XM)
Where YTC is private savings and
(TG) is public savings and T is tax.