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Can you please explain this how?
This is an Economics topic not related to ACCA i guess… but would be really great if you could help.. (Posted it here as I remember PM having some Economics..maybe)X – M = (S – I) + (T – G)
ie Exports minus Imports= Savings- Investment + (Taxes- Government spending)Can you please tell how they are equal?
Thanks a lotAll I can add is this:
The equation shows that the value of exports minus imports is equal to the net savings and net taxes minus net investment and government spending, ensuring that all sides of the equation balance.
So the value of exports (X) minus the value of imports (M) is equal to the difference between savings (S) and investment (I), plus the difference between taxes (T) and government spending (G). This holds true because every transaction in an economy has two sides – a buyer and a seller.
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