In an open economy,a decrease in the pool of funds available for gross investment can arise either from a(n)________ in national saving,a(n)________ in capital inflows,or a(n)________ in capital outflows.

Question

Quizplus · Accepted Answer

A decrease in national saving reduces the funds available for investment. A decrease in capital inflows means less foreign investment is coming into the country, reducing available funds. An increase in capital outflows means more domestic funds are being invested abroad, also reducing the funds available for domestic investment.

In an Open Economy,a Decrease in the Pool of Funds