Chapter 13 Flashcards
1
Q
Closed Economy
A
S = I
2
Q
Net Capital Outflow in an Open Economy
A
S - I = Savings - Investment
3
Q
Positive Net Capital Outflow
A
S > I
Country is a net lender.
4
Q
Negative Net Capital Outflow
A
S < I
Country is a net borrower.
5
Q
Trade Balance = Net Capital Outflow (Proof)
A
Y = C + I + G + NX NX = Y - (C + I + G) NX = (Y-C-G) - I Y - C - G = National Saving (S) NX = S - I
