If a country has a trade surplus, then its A)saving is greater than domestic investment and Y C + I + G. B)saving is greater than domestic investment and Y C +I + G. D)saving is less than domestic investment and Y

Question

If a country has a trade surplus, then its A)saving is greater than domestic investment and Y > C + I + G. B)saving is greater than domestic investment and Y < C + I + G. C)saving is less than domestic investment and Y > C +I + G. D)saving is less than domestic investment and Y < C + I + G.

Quizplus · Accepted Answer

Trade surplus means that a country exports more goods and services than it imports. This means that the country is receiving more income from exports than it is spending on imports. Therefore, the country's saving is greater than its domestic investment, which means that Y (total output) is greater than C (consumption) + I (investment) + G (government spending).

If a Country Has a Trade Surplus, Then Its