Domestic saving must equal domestic investment in
A)both closed and open economies.
B)closed, but not open economies.
C)open, but not closed economies.
D)neither closed nor open economies.

Question

Quizplus · Accepted Answer

In closed economies, there is no international trade or capital flows, so all savings must go into domestic investment. In open economies, domestic saving can differ from domestic investment due to the ability to borrow from or lend to foreign entities.

Domestic Saving Must Equal Domestic Investment in