Asked by
Blast Plays
on Nov 16, 2024Verified
Suppose a country's net capital outflow does not change, but its investment declines by $420 billion. Its saving must have
A) fallen by $420 billion, so its net exports have risen.
B) fallen by $420 billion, but its net exports are unchanged.
C) risen by $420 billion, so its net exports have fallen.
D) risen by $420 billion, but its net exports are unchanged.
Net Capital Outflow
The difference between the purchase of foreign assets by domestic residents and the purchase of domestic assets by foreigners, which reflects the flow of capital out of a country.
Net Exports
The value of a country's total exports minus the value of its total imports, representing a component of the GDP calculation.
Saving
The portion of income not spent on current consumption or taxes, typically stored for future use or investment.
- Appreciate the significance of saving and investment practices, and their contributions to a country's trade balance.
Verified Answer
DO
Learning Objectives
- Appreciate the significance of saving and investment practices, and their contributions to a country's trade balance.