Other things the same, if a country saves more, then: A. net capital outflow rises, so...
Other things the same, if a country saves more, then:
A. net capital outflow rises, so net exports rise.
B. net capital outflow rises, so net exports fall.
C. net capital outflow falls, so net exports rise.
D. net capital outflow falls, so net exports fall.
Homework Answers
Correct Answer:
A
When savings increase, then people and entities make investments in overseas countries. It increases the net capital outflows. Further, people consume less and import decreases. It means that net exports increase as well.
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