Which of the Following Equations Is True in an Open

question 242

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.
• E)Investment = national saving.

---

Definitions:

Operating Cycle

The duration of time it takes for a company to buy inventory, sell it, and convert the sale back into cash. It reflects the efficiency of a company's inventory management and sales processes.

Inventory Cycle

The inventory cycle involves the process from purchasing goods for inventory to selling them to customers, and is key in determining the efficiency of a company's inventory management.

Credit Terms

The conditions under which credit will be extended to a borrower, including the repayment schedule and interest rates.

Comparison Shopping

The practice of comparing prices and features of products or services to find the best deal or value before making a purchase.