*A country’s current national savings and investment identity is expressed in algebraic terms as I – S – (T – G) = (M – X). Assume that the level of domestic investment in a country rises, while the level of private and public saving remains unchanged. In this instance, the rise in domestic: investment will mean
A. a higher trade surplus.
B. a lower trade surplus.
C. a higher trade deficit.
D. trade will be perfectly balanced.
Answer:C
*A country’s current national savings and investment identity is expressed in algebraic terms as I – S – (T – G) = (M – X). Assume that the level of domestic investment in a country rises, while the level of private and public saving remains unchanged. In this instance, the rise in domestic: investment will mean
A. a higher trade surplus. B. a lower trade surplus. C. a higher trade deficit. D. trade will be perfectly balanced.
Explanation: Type: Multiple Choice