Asked by Jacob Matthews on Jun 17, 2024
Verified
A country recently had saving of 250 billion euro and domestic investment of 400 billion euro. What was the value of this country's net exports? Show your work.
Domestic Investment
The total investment in capital assets (such as factories, machinery, and technology) within a country's borders, contributing to the nation's economic growth.
Euro
The official currency of the eurozone, which is used by 19 of the 27 European Union countries.
Net Exports
The value of a country's total exports minus its total imports, measuring the net trade of goods and services with other economies.
- Explain the relationship between domestic savings, domestic investments, and net exports.
Verified Answer
AC
Alexis CarrollJun 21, 2024
Final Answer :
saving = investment + net capital outflow
250 billion euro = 400 billion euro + net capital outflow
-150 billion euro = net capital outflow
net exports = -150 billion euro because net capital outflow = net exports
250 billion euro = 400 billion euro + net capital outflow
-150 billion euro = net capital outflow
net exports = -150 billion euro because net capital outflow = net exports
Learning Objectives
- Explain the relationship between domestic savings, domestic investments, and net exports.