In a large open economy,
A)domestic saving need not equal domestic investment.
B)the domestic interest rate must equal the world interest rate.
C)the IS curve will be steeper than in a closed economy.
D)the IS curve will shift only if the FE curve shifts.

Question

Quizplus · Accepted Answer

In a large open economy, foreign saving and investment flows can have an impact on domestic saving and investment, meaning that they may not necessarily be equal.

In a Large Open Economy