At the equilibrium interest rate in the open economy macroeconomic model, which of the following is the amount that people want to save?
A)the desired quantity of net capital outflow
B)the desired quantity of domestic investment
C)the desired quantity of net capital outflow plus domestic investment
D)the desired quantity of net capital outflow minus domestic investment

Question

Quizplus · Accepted Answer

At the equilibrium interest rate in the open economy macroeconomic model, the amount that people want to save is equal to the desired quantity of net capital outflow plus domestic investment. This is because savings in an open economy is used for both domestic investment and net capital outflow.

At the Equilibrium Interest Rate in the Open Economy Macroeconomic