Question

Investment is 80; the current account balance is -60. The national saving is:

A) Less than or equal to 0
B) Greater than 0 but less than or equal to 30
C) Greater than 30 but less than or equal to 60
D) Greater than 60

Answer 1

The national saving is 20.National Saving = Investment + Current Account Balance = 80 + (-60) = 20

Step-by-step explanation:

In order to calculate the current account balance, we need to use the national saving and investment identity. The national saving is equal to the investment plus the current account balance. Given that the investment is 80 and the current account balance is -60, we can calculate the national saving as follows:

National Saving = Investment + Current Account Balance = 80 + (-60) = 20

Therefore, the national saving is 20.