In an Open Economy, Domestic Investment Equals

question 18

Multiple Choice

In an open economy, domestic investment equals:

• A)net capital inflows.
• B)domestic saving plus net capital outflows.
• C)domestic saving.
• D)domestic saving plus net capital inflows.

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Definitions:

360-Day Year

An accounting assumption that simplifies interest calculations by using a year composed of twelve 30-day months.

Leap Years

Years that contain 366 days instead of the usual 365, with an extra day added to February, occurring every four years to maintain the calendar year's alignment with the Earth's revolutions around the Sun.

Interest Computation

The process of calculating the amount of interest due on a loan or investment based on the principal amount, rate, and time.

Maturity Date

The specific date on which the principal amount of a loan, bond, or other financial instrument is due to be paid back in full.