Domestic saving must equal 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 a closed economy, there are no external trade or financial flows, so domestic saving must equal investment. In an open economy, savings can flow across borders, so domestic saving does not necessarily equal domestic investment.

Domestic Saving Must Equal Investment in