i) In an open economy, Y = C + I + G + NX. Using symbols from this identity, write an expression that defines national saving, S, in an open economy. S = _________________________ . ii) True or False? In an open economy, the following is always true: S = I + NCO, where I is investment spending and NCO is net capital outflow. iii) In an open economy, a country’s net capital outflow is: a.) the value of domestic assets purchased by foreigners minus the value of foreign assets purchased by domestic residents b.) the value of foreign assets purchased by domestic residents minus the value of domestic assets purchased by foreigners.
i) In an open economy, Y = C + I + G + NX. Using symbols from this identity, write an expression that defines national saving, S, in an open economy. S = _________________________ . ii) True or False? In an open economy, the following is always true: S = I + NCO, where I is investment spending and NCO is net capital outflow. iii) In an open economy, a country’s net capital outflow is: a.) the value of domestic assets purchased by foreigners minus the value of foreign assets purchased by domestic residents b.) the value of foreign assets purchased by domestic residents minus the value of domestic assets purchased by foreigners.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Answer These Three Sub Parts
i) In an open economy, Y = C + I + G + NX. Using symbols from this identity, write an
expression that defines national saving, S, in an open economy.
S = _________________________ .
ii) True or False? In an open economy, the following is always true: S = I + NCO, where I is
investment spending and NCO is net capital outflow.
iii)
In an open economy, a country’s net capital outflow is:
a.) the value of domestic assets purchased by foreigners minus the value of foreign assets
purchased by domestic residents
b.) the value of foreign assets purchased by domestic residents minus the value of domestic
assets purchased by foreigners.
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