Which of the Following Statements Is Incorrect for an Open

question 123

Multiple Choice

Which of the following statements is incorrect for an open economy?

• A)A country can have a trade deficit,trade surplus,or balanced trade.
• B)A country that has a trade deficit has positive net capital outflow.
• C)Net exports must equal net capital outflow.
• D)National saving equals domestic investment plus net capital outflow.

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Definitions:

Interest Earned

The amount of money earned over a period of time through investments or savings that accrue interest.

Simple Interest Rate

This rate calculates interest payments only on the initial amount of money (the principal), not on the interest accrued over time.

Simple Annual Interest

Interest earned or paid on the original principal for a year without compounding.

Grow Amount

Increasing the value of a financial asset through investment or saving strategies.