If national saving falls relative to national investment, the current account deficit will increase.

Question

Quizplus · Accepted Answer

When national saving falls relative to national investment, it implies that the country is saving less than it is investing. This situation typically requires borrowing from abroad or selling domestic assets to foreigners, leading to an increase in the current account deficit, as the country spends more on foreign goods and investments than it earns from its exports and income from abroad.

If National Saving Falls Relative to National Investment, the Current