What Is the Formula for Saving in an Open Economy

question 97

Multiple Choice

What is the formula for saving in an open economy?

• A) Saving = Foreign saving + Net capital outflow
• B) Saving = Domestic investment - Net capital outflow
• C) Saving = Domestic saving + Net capital outflow
• D) Saving = Domestic investment + Net capital outflow

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Definitions:

Adjusting Journal Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate years.

Accrual

An accounting principle that recognizes revenues and expenses when they are incurred, regardless of when cash transactions occur.

Adjusting Journal Entries

Entries made at the end of an accounting period to update balances of revenues and expenses to reflect the correct amounts earned or incurred during a period.

Accrual

A financial recording approach that logs income and expenditures at the time they occur, irrespective of the actual cash transaction timing.