A country has $60 million of saving and domestic investment of $40 million. Net exports are

Question

a.

$20 million.
b.

-$100 million.
c.

-$20 million.
d.

$100 million.

Answer 1

To determine the net exports for the country, we can use the savings-investment identity, which states:

\[ \text{Net Exports} = \text{Savings} - \text{Domestic Investment} \]

Substituting the given values:

\[ \text{Net Exports} = 60 \text{ million} - 40 \text{ million} = 20 \text{ million} \]

Therefore, the correct answer for net exports is:

a. $20 million.