If net foreign investment in the United States is positive,how must national saving and domestic investment be related? (Assume that the capital account is zero and net transfers are zero.)
A)Domestic investment and national saving must also be positive.
B)Domestic investment must be less than national saving.
C)Domestic investment must be greater 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 positive, it means that the country is exporting more capital than it is importing. This scenario occurs when national saving exceeds domestic investment, allowing the excess saving to be invested abroad. Therefore, domestic investment must be less than national saving for net foreign investment to be positive.

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