The level of saving in the United States has historically been low relative to the level of domestic investment.Based on this information,we would expect that
A)U.S.net foreign investment has been relatively high.
B)U.S.net exports have been relatively low.
C)U.S.capital inflows are negative.
D)U.S.private saving is less than its public saving.

Question

Quizplus · Accepted Answer

When the level of saving in the United States is low relative to the level of domestic investment, it implies that the country needs to borrow from abroad to finance its investment. This situation typically leads to a trade deficit, meaning that net exports are relatively low, as the country imports more than it exports to fill the gap between domestic saving and investment.

The Level of Saving in the United States Has Historically