An increase in UK private saving
A) Increases UK net exports and UK net capital outflow the same amount.
B) Increases UK net exports and decreases UK net capital outflow.
C) Decreases UK net exports and UK net capital outflow the same amount.
D) Decreases UK net exports and increases UK net capital outflow.

Question

Quizplus · Accepted Answer

An increase in UK private saving leads to more funds available for investment abroad, increasing net capital outflow. This also results in an increase in net exports, as the country exports more capital.

An Increase in UK Private Saving