Which of the following equations is true in an open economy?
A)Private saving = net foreign investment + domestic investment.
B)National saving = net capital flows.
C)Net exports = -Financial account balance.
D)Net exports = net foreign investment.

Question

Quizplus · Accepted Answer

In an open economy, net exports (exports minus imports) are equal to net foreign investment, which represents the difference between the savings and investment in the economy. This reflects the balance of trade and capital flows.

Which of the Following Equations Is True in an Open