National Income Accounting
Overview
The national income account equation for a closed equation economy is given by
{% Y = C + I + G %}
where
- {% Y %} = National Income
- {% C %} = Consumption
- {% I %} = Investment
- {% G %} = Government Expenditure
In the presence of trade with other nations, the equation becomes
{% Y = C + I + G + EX - IM %}
The current account balance is then defined.
{% CA = EX - IM %}
