If Canada is a "net lender" abroad, ________.(Assume that the capital account is zero and net transfers are zero.)
A)Canada must be exporting less than it is importing
B)net capital flows must be positive
C)domestic saving is greater than domestic investment
D)net foreign investment must be negative
E)Canada's net exports is lower than it should be

Question

Quizplus · Accepted Answer

If Canada is a net lender, it means that it is saving more than it is investing domestically, resulting in a surplus of funds that are then lent abroad. This is reflected in a positive net capital flow, which means that more money is coming into Canada than going out. The balance of trade (exports minus imports) does not necessarily have to be negative for Canada to be a net lender.

If Canada Is a "Net Lender" Abroad, ________