Suppose that domestic investment in Japan is 20.2% of GDP, and Japanese national savings is 24% of GDP.What is Japan's foreign investment as a percentage of GDP?
A)0.84%
B)1.19%
C)3.8%
D)27.8%
E)44.2%

Question

Quizplus · Accepted Answer

Foreign investment as a percentage of GDP can be calculated as follows:

Foreign investment = Total investment - Domestic investment

Total investment = National savings + Foreign savings

= 24% + Foreign savings

Therefore, Foreign investment = (24% + Foreign savings) - 20.2%
= 3.8%

Hence, the correct answer is option C (3.8%).

Suppose That Domestic Investment in Japan Is 20