The value of net exports equals the value of

Question

a.

national saving - domestic investment.
b.

public saving.
c.

national saving.
d.

national saving - net capital outflow.

Answer 1

The correct answer is:

d. national saving - net capital outflow.

Net exports can also be expressed as the difference between national saving and domestic investment in an open economy context. Net capital outflow is related to net exports, as it reflects the net flow of capital out of a country. Therefore, national saving can be re-written in this context as the sum of domestic investment and net exports.