A net capital inflow occurs in open economies where:
A)investment is higher than national savings.
B)investment is lower than national savings.
C)investment is equal to national savings.
D)Any of these could be true.

Question

Quizplus · Accepted Answer

In an open economy, net capital inflow occurs when investment is higher than national savings. This means that the economy is attracting foreign investment to make up for the shortfall in domestic savings. As a result, the economy is able to finance its investment needs and potentially achieve higher growth rates.

A Net Capital Inflow Occurs in Open Economies Where