According to the saving and investment equation, if net foreign investment rises by $35 million:
A)national saving in excess of domestic investment will increase by $35 million.
B)national savings will increase by $35 million.
C)domestic investment will fall by $35 million.
D)national saving in excess of domestic investment will decrease by $35 million.

Question

Quizplus · Accepted Answer

According to the saving and investment equation, Net foreign investment = National saving - Domestic investment. If net foreign investment rises by $35 million, it means that national saving exceeds domestic investment by $35 million. Therefore, national saving in excess of domestic investment will increase by $35 million.

According to the Saving and Investment Equation, If Net Foreign