Empirically,there is a close positive relationship between domestic savings and investment.This is consistent with what we should expect to observe in
A)a closed economy.
B)the Mundell-Flemming model with perfect capital mobility.
C)the Mundell-Flemming model with perfect capital mobility and flexible exchange rates.
D)the Mundell-Flemming model with perfect capital mobility and fixed exchange rates.
E)none of the above.

Question

Quizplus · Accepted Answer

In a closed economy, all savings are available for domestic investment. Therefore, it is expected that there would be a positive relationship between domestic savings and investment.

Empirically,there Is a Close Positive Relationship Between Domestic Savings and Investment.This