If the United States is a "net lender" abroad,________.(Assume that the capital account is zero and net transfers are zero.)
A)the United States must be exporting less than it is importing
B)net capital flows must be positive
C)domestic saving is greater than domestic investment
D)net foreign investment must be negative

Question

Quizplus · Accepted Answer

If the United States is a net lender abroad, it means that it is lending more money to foreigners than it is borrowing from them. This results in a positive net capital flow, which means that domestic saving is greater than domestic investment. Therefore, option C is the correct choice. Option A is incorrect because the balance of trade is not the same as the balance of payments. Option B is incorrect because net capital flows are already assumed to be positive. Option D is incorrect because net foreign investment is not specified in the given information.

If the United States Is a "Net Lender" Abroad,________