Explain Why Saving Need Not Equal Domestic Investment in an Open

question 56

Essay

Explain why saving need not equal domestic investment in an open economy.

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Definitions:

Sociometer Model

The idea that a basic function of self-esteem is to indicate to the individual how much he or she is accepted by other people.

Individualist Cultures

Societies that prioritize the needs and goals of the individual over the group.

Collectivist Cultures

Societies that prioritize group goals over individual ones and emphasize strong social ties and interdependence.

Ostracism

The exclusion of an individual or group from wider society, often used as a form of social punishment or correction.