A nation that is running a savings deficit

Question

Quizplus · Accepted Answer

A savings deficit means that the nation is not saving enough to fund its investments, and it must therefore rely on borrowing from other countries or institutions. This involves spending more than it produces (choice A) and investing domestically more than it saves (choice B). As a result, there will be a net capital outflow (choice C), which refers to the difference between the amount of capital leaving a country and the amount entering it.

A Nation That Is Running a Savings Deficit