What is net capital outflow equal to?
A) national saving minus the net exports
B) domestic investment plus national saving
C) national saving minus domestic investment
D) domestic investment minus national saving

Question

Quizplus · Accepted Answer

Net capital outflow is equal to national saving minus domestic investment. It represents the difference between how much a country is saving domestically and how much it is investing domestically. If the net capital outflow is positive, it means that the country is investing more abroad than it is saving domestically. If it is negative, it means that the country is saving more domestically than it is investing abroad. Option A is incorrect because net exports are not included in the calculation of net capital outflow. Option B is incorrect because it adds domestic investment, which is not part of the calculation. Option D is incorrect because it subtracts national saving from domestic investment, which is the opposite of the correct formula.

What Is Net Capital Outflow Equal To