Which circular flow model represents an open economy, and what is its income identity?

1. The four-sector model adds the external sector to households, firms and government. 2. The external sector comprises exports and imports, which is what makes the economy open. 3. Expenditure for the whole economy therefore includes domestic expenditure, C plus I plus G, together with net exports, X minus M. 4. The identity printed in the textbook is Y equals C plus I plus G plus the bracket X minus M. 5. The textbook adds that in real life only a four-sector economy exists. _Source: TN HSC Class 12 Economics (Samacheer Kalvi, Govt of Tamil Nadu), Ch 1 "Introduction to Macro Economics", §1.9.3_