Question

How does funding from national savings differ from funding obtained from capital inflows? National savings are repaid domestically, whereas capital inflows are repaid to a foreigner. Capital inflows come from domestic individuals, whereas national savings come from government sources. Funds from national savings must be repaid, whereas capital inflows do not have to be repaid. National saving funds can be used for a wider variety of investments than capital inflows.

Answer 1

National savings are repaid domestically, whereas capital inflows are repaid to a foreigner.

Step-by-step explanation:

National savings refer to the portion of the income that is not consumed, or spent by government. It is the combined or aggregate value of all private savings and the budget balance. Therefore, national savings are repaid domestically when borrowed.

Capital inflow refers to the net amount of funds that is moved into a particular benefiting company from another country. It is usually in form of investments by foreigners and it is meant to be paid back to them.