In an open economy, savings equals:
A) investment minus net exports.
B) investment plus net exports.
C) net exports minus investment.
D) investment plus imports minus exports.

Question

Quizplus · Accepted Answer

In an open economy, savings equals investment plus net exports since net exports represent the excess of exports over imports which increases the amount of funds available for investment. Therefore, the correct option is (B) investment plus net exports.

In an Open Economy, Savings Equals