Which of the Following Equations Is True in an Open

question 268

Multiple Choice

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

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

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Definitions:

Stockholders' Right

Entitlements or privileges afforded to shareholders, including the right to vote on corporate matters, receive dividends, and share in the distribution of assets upon liquidation.

Dividends

Payments made by a corporation to its shareholder members, typically from profits or reserves.

Retained Earnings

The portion of net income left over after dividends are paid to shareholders, reinvested in the business or used to pay off debt.

Corporate Form

A legal structure for a business recognized as a separate legal entity from its owners, providing limited liability.