If net foreign investment in the United States is negative,how must national saving and domestic investment be related?
A)Domestic investment and national saving must also be negative.
B)Domestic investment must be greater than national saving.
C)Domestic investment must be less than national saving.
D)Domestic investment can be greater than or less than national saving.

Question

Quizplus · Accepted Answer

When net foreign investment in the United States is negative, it means that the amount of foreign assets held by U.S. citizens is less than the amount of U.S. assets held by foreigners. This situation typically occurs when a country is importing more than it is exporting, or when domestic investment is higher than national saving. Therefore, for net foreign investment to be negative, domestic investment must be greater than national saving, as the excess investment needs are financed by borrowing from abroad.

If Net Foreign Investment in the United States Is Negative,how