Net capital outflow is equal to:
A) national saving minus the trade balance.
B) domestic investment plus the trade balance.
C) domestic investment minus national saving.
D) national saving minus domestic investment.

Question

Quizplus · Accepted Answer

Net capital outflow is equal to the difference between national saving and domestic investment. This is because net capital outflow represents the amount of domestic saving used to finance foreign investment or the amount of foreign saving used to finance domestic investment. Therefore, the correct answer is D, national saving minus domestic investment.

Net Capital Outflow Is Equal To