WAEC Economics 2012 Paper

Concept:National income is the total final expenditure in an open economy, which includes consumption, investment, and net exports.Explanation:In an open economy, domestic output is used for consumption $(C)$, investment $(I)$, exports $(X)$, and imports $(M)$.Exports add to national income, while imports represent spending on foreign goods and must be subtracted.Therefore, net exports are $X - M$.Adding this to domestic spending gives the national income identity: $Y = C + I + (X - M)$.Among the given options, this matches option C.Answer:$Y = C + I + (X - M)$, which is option C.