In an open economy, national saving equals domestic investment____________________?

A. plus the net outflow of capital abroad.

B. minus the net exports of goods and services.

C. plus the government’s budget deficit.

D. minus foreign portfolio investment.

National saving of any nation is derived from the people´s savings from the total earning after paying for all nessesities, taxes and government purchase. We can further include net export to the total saving, which is export minus import. We know value of net exports must be equal to the value of net capital outflow. Thus, national saving equals domestic investment and the net outflow of capital abroad.

S= Y-C-G+NX

Where S = saving, Y= Income, C= current consumption, G= Governement purchase, NX= Net export.

In an open economy, national saving equals domestic investment____________________? A. plus the net outflow of capital abroad. B. minus the net exports of goods and services. C. plus the government’s budget deficit. D. minus foreign portfolio investment.

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In an open economy, national saving equals domestic investment____________________?

A. plus the net outflow of capital abroad.

B. minus the net exports of goods and services.

C. plus the government’s budget deficit.

D. minus foreign portfolio investment.