For a given amount of UK national saving, an increase in UK net capital outflow decreases UK domestic investment.

Question

Quizplus · Accepted Answer

Net capital outflow represents the difference between the amount of national saving that is invested domestically and the amount of national saving that is invested abroad. An increase in net capital outflow means that more money is being invested abroad, leaving less available for domestic investment. Therefore, an increase in net capital outflow decreases UK domestic investment.

For a Given Amount of UK National Saving, an Increase