Which of the Following Equations Is True in an Open

question 256

Multiple Choice

Which of the following equations is true in an open economy?

• A)Private saving = net foreign investment + domestic investment.
• B)Domestic saving = net capital flows.
• C)Net exports = -Financial account balance.
• D)Net exports = net foreign investment.

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Definitions:

Equilibrium Price

The market price where the quantity of goods supplied is equal to the quantity of goods demanded.

Equilibrium Quantity

The quantity of goods or services at which supply equals demand, leading to market stability.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, leading to a stable market condition.

Equilibrium Quantity

The quantity of goods or services supplied is equal to the quantity demanded at the market equilibrium price.