Saving is S, investment is I, net taxes is NT, government expenditure is G, exports is X, and imports is M. Using these symbols, what is the relationship among the saving, investment, net taxes, government expenditure, exports, and imports?
What will be an ideal response?
The relationship is that (X - M) = (S - I) + (NT - G), or net exports equals the private sector balance plus the government sector balance.
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