If a country has saving of $2 trillion and investment of $1.5 trillion,then it has
A)a trade surplus and its net capital outflow = $.5 trillion.
B)a trade surplus and its net capital outflow = -$.5 trillion.
C)a trade deficit and its net capital outflow = $.5 trillion.
D)a trade deficit and its net capital outflow = -$.5 trillion.

Question

Quizplus · Accepted Answer

A country's saving minus its investment is equal to its net capital outflow (NCO). In this case, the NCO is $2 trillion - $1.5 trillion = $0.5 trillion. Since the NCO is a positive value, the country has a trade surplus (exporting more than it imports).

If a Country Has Saving of $2 Trillion and Investment