Suppose U.S. net exports are -$400 billion and the U.S. government sector surplus is $200 billion. Then in the private sector, saving minus investment equals
A) -$600 billion.
B) -$200 billion.
C) +$600 billion.
D) +$200 billion.

Question

Quizplus · Accepted Answer

The correct answer is A because saving minus investment equals the current account balance plus the government sector surplus. In this case, the current account balance is -$400 billion and the government sector surplus is $200 billion, so saving minus investment equals -$600 billion.

Suppose US