Question

When net export is positive, it follows that .... Select one: • a. investment must be higher than national saving • b. domestic demand must be lower than foreign demand • c. national saving must be higher than investment • d. net capital outflow must be negative

          When net export is positive, it follows that ....
Select one:
• a. investment must be higher than national saving
• b. domestic demand must be lower than foreign demand
• c. national saving must be higher than investment
• d. net capital outflow must be negative
        
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Added by Muhammad Faris S.

Principles of Economics
Principles of Economics
Gregory Mankiw 8th Edition
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When net export is positive, it follows that .... Select one: • a. investment must be higher than national saving • b. domestic demand must be lower than foreign demand • c. national saving must be higher than investment • d. net capital outflow must be negative
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Transcript

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00:01 Hello and welcome to this video solution of numerate.
00:04 You have to tell when net export is positive, it follows that you have to select the one.
00:10 So let's let's discuss a bit on the on this topic when the net export is positive, right? so net export is let me write net export that is equal to the total export minus the total import, right? right.
00:43 Now, this is net export is positive.
00:49 Ok, this means that the net capital outflow from the country that is foreign investment, right? this is positive.
00:58 So we can say that foreign investment is positive, right? in this case, right? if this foreign investment is positive, we can say that domestic investment, this domestic demand must be lower than the foreign demand, right? that foreign demand is higher in this case.
01:28 That's why foreign investment is positive.
01:30 So you can easily select option b.
01:32 That is domestic demand must be lower than foreign demand...
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