In an open economy, the national income (Y) of the economy is: (C, I, G, X, M stand for Consumption, Investment, Govt. Expenditure, total exports and total imports respectively.)

1. In macroeconomics, the national income (Y) of an economy can be measured using the expenditure approach. 2. In an open economy (which engages in international trade), the total expenditure consists of: Consumption (C) by households, Investment (I) by firms, Government Expenditure (G) on goods and services, and net exports. 3. Net exports are calculated as total exports (X) minus total imports (M). 4. Therefore, the national income identity in an open economy is Y = C + I + G + (X - M).