Asked by Tessa Eddington on May 27, 2024
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To state that national saving is equal to investment, for a closed economy, is to state an accounting identity.
National Saving
The total amount of saving in a country, which includes both private savings and public (government) savings.
Closed Economy
An economic system that does not engage in international trade with outside countries, relying on its own resources.
Accounting Identity
A fundamental equation that must always hold true, often without regard to time or specific instances, in accounting and economics.
- Interpret the concept of national saving and its equivalence to investment in a closed economy.
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Learning Objectives
- Interpret the concept of national saving and its equivalence to investment in a closed economy.
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