From the national income identity in the United States, if NX $\lt$ 0, this must equal the:

Question

From the national income identity in the United States, if NX  $\lt$ 0, this must equal the:

Quizplus · Accepted Answer

When NX (net exports) is less than 0, it means that the country is importing more than it is exporting, which results in a trade deficit. To finance this gap between investment and domestic savings, the country needs to borrow additional funds. Hence, the correct answer is the additional borrowing the United States does to finance the gap between investment and domestic savings.

From the National Income Identity in the United States, If <\lt<

From the National Income Identity in the United States, If $\lt$