A nation's investment must be financed by

Question

Quizplus · Accepted Answer

Investment is financed by either using domestic savings or by borrowing from the rest of the world. Therefore, both national saving and borrowing from the rest of the world are necessary to finance a nation's investment. Option A is incorrect because the government's budget deficit refers to the difference between government spending and revenue, which is not directly related to investment. Option C is incorrect because borrowing from the rest of the world alone may not be sufficient to finance all of a nation's investments. Option D is incorrect because although national saving can be used to finance investments, it may not be sufficient on its own.

A Nation's Investment Must Be Financed by