If Canada Has Negative Net Exports, Which of the Following

question 220

Multiple Choice

If Canada has negative net exports, which of the following must be true? (Assume that the capital account is zero and net transfers are zero.)

• A)The balance on the financial account must equal the balance on the current account.
• B)Net foreign investment must be negative as well.
• C)Domestic private saving must be less than net foreign investment.
• D)Domestic public saving must be less than net foreign investment.
• E)Domestic public savings must be greater than domestic private savings.

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Definitions:

Opportunity Cost

Giving up possible benefits from other solutions when a single solution is chosen.

Economic Growth

The increase in the inflation-adjusted market value of the goods and services produced by an economy over a period of time.

Entrepreneurship

The act of creating, organizing, and running a new business venture, typically characterized by risk-taking and innovation to achieve profit and growth.

Capital

Resources, especially financial assets, used to create goods, services, or wealth.