If net foreign investment is positive, which of the following must be true? (Assume that the capital account is zero and net transfers are zero.)
A)Capital outflows are less than capital inflows.
B)Domestic investment must be less than national saving.
C)Net exports are negative.
D)The country will owe more to foreigners in the future.
E)None of the above is true when net foreign investment is positive.

Question

Quizplus · Accepted Answer

When net foreign investment is positive, it means that the country is investing more abroad than foreigners are investing in the country. This implies that national saving exceeds domestic investment, as the excess saving is being used to invest abroad.

If Net Foreign Investment Is Positive, Which of the Following