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

Question

Quizplus · Accepted Answer

As a net lender, the United States is exporting its savings to other countries through capital flows, which means that its national saving (which is the source of the savings) must be higher than its domestic investment. Option A is incorrect because net lending/ borrowing is not directly related to trade balances. Option B is correct but not precise, as positive net capital flows are a consequence of net lending, not a condition for it. Option D is incorrect because negative net foreign investment would imply that the United States is a net borrower, not a lender.

If the United States Is a "Net Lender" Abroad,________