When an economy's saving is greater than its domestic investment, it implies that: a Net Capital Outflow (NCO) is positive. b Net Capital Outflow (NCO) is negative. c Net Exports (NX) are negative. d There is a trade deficit.

When an economy's saving is greater than its domestic investment, it implies that: a Net Capital Outflow (NCO) is positive. b Net Capital Outflow (NCO) is negative. c Net Exports (NX) are negative. d There is a trade deficit.

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Open-Economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 3QCMC

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Question

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When an economy's saving is greater than its domestic investment, it implies that:

a Net Capital Outflow (NCO) is positive.

b Net Capital Outflow (NCO) is negative.

c Net Exports (NX) are negative.

d There is a trade deficit.

Definition Definition Situation in which a country spends more on imports than it makes through exports. When a trade deficit exists, net exports will be negative. Trade Deficit = (Imports) - (Exports)

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