Figure 32-3
Refer to the following diagram of the open-economy macroeconomic model to answer the questions that follow.

Graph (a)
Graph (b) Graph (c)
-Refer to Figure 32-3. At an interest rate of 4 percent, the diagram indicates that
A)there is a surplus in the market for foreign-currency exchange.
B)national saving equals domestic investment.
C)net capital outflow + domestic investment = national saving.
D)in the market for foreign-currency exchange the quantity of dollars supplied equals the quantity of dollars demanded.

Question

Figure 32-3
Refer to the following diagram of the open-economy macroeconomic model to answer the questions that follow.
​
Graph (a)
Graph (b)   Graph (c)  ​
-Refer to Figure 32-3. At an interest rate of 4 percent, the diagram indicates that
A)there is a surplus in the market for foreign-currency exchange. 
B)national saving equals domestic investment. 
C)net capital outflow + domestic investment = national saving. 
D)in the market for foreign-currency exchange the quantity of dollars supplied equals the quantity of dollars demanded.

Quizplus · Accepted Answer

At an interest rate of 4 percent, the diagram suggests that the sum of net capital outflow and domestic investment equals national saving, as both are components of the financial market balance.

Figure 32-3 Refer to the Following Diagram of the Open-Economy Macroeconomic Model