Question

In an open economy, total investment equals: national savings minus private savings minus capital inflow. private savings plus national savings plus capital inflow. national savings plus capital inflow. private savings plus capital inflow.

Answer 1

Answer:

national savings plus capital inflow.

Explanation:

An open economy is one where both local and foreign parties are involved in trade activities. Trade items can be the traditional exchange of goods and services, or it can be managerial exchange and technological transfers.

So in an open economy total investment will be an addition of the national savings that local parties make, plus the capital inflows from foreign parties involved in trading in the country.

When the economy is not open total investment is equal to savings minus capital outflow