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

Question

Quizplus · Accepted Answer

Net capital outflow (NX) is the difference between national saving (S) and domestic investment (I), i.e., NX = S - I. Option C represents this relationship. Option A is incorrect because the trade balance is not directly related to net capital outflow. Option B is incorrect because it adds investment and saving instead of subtracting them. Option D is incorrect because it reverses the order of subtraction.

Net Capital Outflow Is Equal to