In a Small Open Economy, If Domestic Saving Equals $50

question 38

Multiple Choice

In a small open economy, if domestic saving equals $50 billion and domestic investment equals $50 billion, then
There is and net capital outflow equals .
 

• A)a trade deficit; $100 billion
• B)balanced trade; $0
• C)a trade surplus; $100 billion
• D)balanced trade; $100 billion

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Definitions:

Dispositionism

Dispositionism is a psychological theory that attributes behavior to inherent qualities or traits of the individual rather than to external circumstances.

Collectivism

An ideology or value system that emphasizes the priority of group goals over individual goals and the importance of cohesion within social groups.

Situationism

A theory in psychology that suggests human behavior is greatly influenced by external situational factors rather than by internal traits or motivations.

Fundamental Attribution Error

The tendency for observers to underestimate situational influences and overestimate personal characteristics when explaining others' behaviors.