In the open-economy macroeconomic model, the market for loanable funds equates national saving with
A)domestic investment.
B)net capital outflow.
C)the sum of domestic investment and net capital outflow.
D)the sum of national consumption and government spending.

Question

Quizplus · Accepted Answer

In the open-economy macroeconomic model, the market for loanable funds equates national saving with the sum of domestic investment and net capital outflow. This is because in an open economy, savings can be used either for domestic investment or to finance capital outflows to other countries.

In the Open-Economy Macroeconomic Model, the Market for Loanable Funds