Econ: Balance of Payments sector, please, private, 621, net

rohitdoshi

Can anyone please explain to me why: (CFAI p. 621)

Y= C+ I + G + X -M

goes on to be

Y= C + S + T ?


and how does X-M (net exports) come to equal the sum of Government sector + Private sector?

How do net exports relate to gov and private??

An explanation would be highly appreciated

iteracom

the first equation does not go to be the 2nd one.

they are two separate views of GDP.

The 2nd part comes from

C+S+T = C+I+G+X-M
or
C cancels
(S-I)+(T-G) = (X-M)

T-G = Govt Sector
Taxes (Govt Collection)- Govt Spending = Govt Sector

S (Savings) - I(Investment) = Private Sector.

CP