In an Open Economy, National Saving Can Be Less Than

question 188

True/False

In an open economy, national saving can be less than investment.

---

Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets over its current liabilities.

Investing Activity

Transactions involving the purchase or sale of long-term assets and other investments not included in cash equivalents.

Return on Assets

A financial ratio indicating how profitable a company is relative to its total assets, measuring the efficiency of asset use.

Leverages

The use of borrowed money (debt) in addition to equity in the investment to finance the purchase of assets and increase the potential return on investment.