If saving is greater than domestic investment,then A)there is a trade deficit and Y C + I + G. B)there is a trade deficit and Y C + I + G. D)there is a trade surplus and Y

Question

If saving is greater than domestic investment,then A)there is a trade deficit and Y > C + I + G. B)there is a trade deficit and Y < C + I + G. C)there is a trade surplus and Y > C + I + G. D)there is a trade surplus and Y < C + I + G.

Quizplus · Accepted Answer

When saving is greater than domestic investment, the excess saving is typically used to finance foreign investment, leading to a trade surplus. This implies that the total output (Y) is greater than the sum of consumption (C), investment (I), and government spending (G).

If Saving Is Greater Than Domestic Investment,then