Which of the following statements is incorrect for an open economy?
A)A country can have a trade deficit,trade surplus,or balanced trade.
B)A country that has a trade deficit has positive net capital outflow.
C)Net exports must equal net capital outflow.
D)National saving equals domestic investment plus net capital outflow.

Question

Quizplus · Accepted Answer

A country that has a trade deficit has negative net capital outflow. This is because a trade deficit means the country is importing more than it is exporting, which leads to a net outflow of capital to pay for those imports.

Which of the Following Statements Is Incorrect for an Open