Which of the following statements is true?

Question

Quizplus · Accepted Answer

A) If private saving is greater than private investment, it means that the private sector has surplus funds available to invest in other areas or to lend to the public or government.

B) If private investment is greater than private saving, it means that the private sector is investing more than it is saving from its income, which creates a deficit that must be financed by borrowing from other sources, such as the government or foreign countries.

C) If private investment is greater than private saving, then either the government or net export sector must have a surplus to finance the deficit created by the private sector. This is because savings equals investment in a closed economy, so any excess of investment over saving must be financed by inflows of resources from other sectors.

Which of the Following Statements Is True