Asked by Chris Fragy on Jul 21, 2024
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In an open economy, national saving can be less than investment.
National Saving
The total amount of savings in a country, which is comprised of both private savings by households and the savings of the government, representing the difference between a nation’s income and consumption.
Open Economy
An economy that allows for trading and financial transactions with other countries.
Investment
Refers to the purchase of goods that are not consumed today but are used in the future to create wealth, such as purchasing machinery for a factory.
- Comprehend the potential outcomes and consequences when a country's internal investment surpasses its total national savings.
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Learning Objectives
- Comprehend the potential outcomes and consequences when a country's internal investment surpasses its total national savings.
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