Final answer:
The two main sides of the national saving and investment identity are the total domestic savings and the financial capital demanded for investment and trade deficits.
Step-by-step explanation:
The two main sides of the national saving and investment identity can be defined as the total supply of financial capital that is available in the economy, and the total demand for financial capital by borrowers. These two sides can be broken into more specific components: on one side, we have private saving plus government saving (or dissaving if the government is running a deficit), which represents the total domestic savings. On the other side, we have domestic investment and the current account balance, which when in deficit indicates a trade deficit (imports greater than exports). When we say that an economy has a current account deficit and a budget deficit, it implies that the total domestic savings are insufficient to fund domestic investment needs, leading to borrowing from abroad.