An increase in net foreign investment is possible through a decrease in national saving or a decrease in domestic investment.

Question

Quizplus · Accepted Answer

An increase in net foreign investment is typically associated with an increase in national saving or a decrease in domestic consumption, not a decrease in national saving or a decrease in domestic investment. Higher national saving can provide more resources for investment domestically or abroad, while a decrease in domestic investment could potentially increase net foreign investment if those savings are instead invested in foreign assets.

An Increase in Net Foreign Investment Is Possible Through a Decrease