Which of the following equations is true in an open economy? a. Domestic saving = net...

Which of the following equations is true in an open economy?

a. Domestic saving = net capital flows.

b. Net exports = -Financial account balance.

c. Private saving = net foreign investment + domestic investment.

d. Net exports = net foreign investment.

Expert Solution

Answer: d. Net exports = net foreign investment.

In an open economy, (NX) Net exports = (NCO) Net capital outflow.

Net value of the goods and services sold by a country (NX) = Net value of the assets acquired (NCO)

Net capital outflow is also called net foreign investment.

Net exports is the difference between exports and imports of goods and services.

Rahul Sunny answered 2 years ago

in an open economy national saving equals domestic invest,ent plus net capital outflow. true or false

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