A country's saving is greater than its domestic investment.This difference means that its
A)net capital outflow and net exports are positive.
B)net capital outflow and net exports are negative.
C)net capital outflow is positive and net exports are negative.
D)net capital outflow is negative and net exports are positive.

Question

Quizplus · Accepted Answer

When a country's saving is greater than its domestic investment, it implies that the country is lending to other countries, leading to a positive net capital outflow. This also means that the country is exporting more than it is importing, resulting in positive net exports.

A Country's Saving Is Greater Than Its Domestic Investment