An increase in SA private saving
A)increases SA net exports and SA net capital outflow the same amount.
B)increases SA net exports and decreases SA net capital outflow.
C)decreases SA net exports and SA net capital outflow the same amount.
D)decreases SA net exports and increases SA net capital outflow.

Question

Quizplus · Accepted Answer

An increase in private saving in South Africa (SA) would lead to an increase in the supply of loanable funds, which can result in an increase in net capital outflow. This, in turn, increases net exports as the country invests more abroad, leading to a surplus in the trade balance.

An Increase in SA Private Saving