WBCS.LIVE practice question

In an open economy, the National Income (Y) of the economy is [C, I, G, X, M, Y stand for consumption, Investment, Government Expenditure, Total Exports, Total Imports and National Income respectively]. Select the correct answer from the following.

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Y = C + I + G + X
  2. Y = I + G - X + M
  3. Y = C + I + G + (X - M)
  4. Y = C + I - G + (X - M)

Correct answer and explanation

Correct answer: Y = C + I + G + (X - M)