The level of saving in Japan has historically been high relative to the level of domestic investment.Based on this information,we would expect that
A)Japan's net foreign investment has been relatively low.
B)Japan's net exports have been relatively high.
C)Japan's capital inflows are positive.
D)Japan's private saving is greater than its public saving.

Question

Quizplus · Accepted Answer

When a country's level of saving is high relative to its level of domestic investment, it typically means that the excess savings are used to invest abroad, leading to higher net exports. This is because the savings that are not used for domestic investment can be used to purchase foreign assets, which is recorded as net foreign investment. High net foreign investment is associated with high net exports in the balance of payments.

The Level of Saving in Japan Has Historically Been High