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

Question

Quizplus · Accepted Answer

Net foreign investment is equal to national saving minus domestic investment. Therefore, if net foreign investment falls by $35 million, it means that national saving in excess of domestic investment decreases by the same amount.

According to the Saving and Investment Equation, If Net Foreign