Question

With respect to the national saving and investment identity for any country, the quantity of _______________ at any given time by savings must ________________ for purposes of making investments..A. foreign aid supplied; be lower than the quantity of domestic aid demandedB. foreign financial capital imports; equal to supply of domestic capital availableC. foreign capital imports; less than the supply of domestic capital availableD. financial capital supplied; equal the quantity of capital financial demanded

Answer 1

Answer:

D) financial capital supplied; equal the quantity of capital financial demanded

Explanation:

All the financial capital supplied in the US economy comes from private savings (by individuals and businesses) and capital from foreign investors.

If investments in the US economy are going to be financed only by domestic savings (no capital from foreign investors), then private savings in the economy should equal the demand for financial capital.