if domestic savings exceeds investment, then net exports are ________ and net capital outflows are __________....
if domestic savings exceeds investment, then net exports are ________ and net capital outflows are __________.
a) positive; positive
b) positive; negative
c) negative; positive
d) negative; negative
Homework Answers
Answer
Option a
a) positive; positive
A domestic saving exceeds investments means the domestic firms have investments to produce and export so the net export is positive and also the money is invested abroad because saving -investment =investments abroad=net capital outflow.
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