Asked by George

Need help here plz.

In a private closed economy, if aggregate expenditures equal GDP, then...

A = Consumption equals investment
B = Planned investment equals to saving.
C = Disposable income equals consumption minus saving
D = Consumption equals aggregate expenditures.
Answered by economyst
GDP = C+I+G = aggregate expenditures or total income. And total income can either be spent on consumption (C), saved (S), or used pay taxes (T). So GDP=C+S+T
SO C+I+G = C+S+T
Assuming a balanced budget, T=G.
And by definition C=C.
So, S=I, go with answer B.

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