In an open economy, the current account balance equals ________.(Assume that the capital account is zero and net transfers are zero.)
A)net foreign investment + domestic investment
B)net capital outflows
C)the financial account balance + net income on investments
D)net foreign investment
E)domestic saving

Question

Quizplus · Accepted Answer

In an open economy, the current account balance is equal to net foreign investment, which represents the difference between savings and domestic investment.

In an Open Economy, the Current Account Balance Equals ________