Given that S represents savings, I stands for domestic investment, X denotes exports of goods and services, and M indicates imports of goods and services, which of the following equations is correct?

Show Answers

S minus I equals X equals MThe sum of S and I is equal to the sum of X and MSavings equals investment minus the total of exports and importsThe difference between S and I is equal to the ratio of X to M

Explanation

Option A is correct because the relationship S - I = X = M accurately represents the equality between net savings minus investment and the balance of exports and imports. The other options do not correctly express this economic identity.