Last year a country had $700 billion of saving and $900 of investment. This year it had $1000 billion of saving and $800 billion of investment. By how much did net capital outflow change? By how much did net exports change? How is it possible for a country to have saving that is greater than investment?
Both net capital outflows and net exports rose from -$200 billion to +$200 billion, an increase of $400 billion. When a country's saving exceeds its investment it means that on net it is purchasing foreign assets from abroad. This addition to residents' net holdings of foreign is a part of domestic saving.
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Which of the following cannot be controlled precisely by the Federal Reserve?
A) Government securities held by the New York Federal Reserve B) The discount rate C) Reserve requirement ratios D) Total bank reserves
Which of the following supply shocks will shift the long-run aggregate supply curve outward?
a. An increase in business taxes b. An increase in gasoline taxes c. An increase in the cost of raw materials d. An increase in the amount and cost of government regulation e. An increase in agricultural output
If a person could increase total utility by purchasing more candy and fewer apples, then the
a. total utility from candy must exceed the total utility from apples b. marginal utility of candy must exceed the marginal utility of apples c. marginal utility per dollar spent on candy must exceed the marginal utility per dollar spent on apples d. total utility per dollar spent on candy must exceed the total utility per dollar spent on apples e. marginal utility per dollar spent on candy must be less than the marginal utility per dollar spent on apples
During periods of hyperinflation, which of the following is the most likely response of consumers?
A. Save as much as possible. B. Spend money as fast as possible. C. Invest as much as possible. D. Lend money.