Question 24 2 pts Between 2000 and 2009, tough economic times lead to investment

Question

Question 24 2 pts Between 2000 and 2009, tough economic times lead to investment falling by a larger percentage than saving rose, so net capital outflow rose O investment falling by by a larger percentage than saving, so net capital outflow rose. investement falling by a smaller percentage than saving, so net capital outflow fell. investment and saving both falling by about the same percentage Question 25 2 pts If a country has business opportunities that are relatively attractive to other countries, we would expect it to have both positive net exports and positive net capital outflow. both negative net exports and negative net capital outflow positive net exports and negative net capital outflow. negative net exports and positive net capital outflow. O

Explanation / Answer

(Question 24) Option (2)

During economic recession, both investment and saving decreases, but investment falls at a higher rate than savings fall, so net capital outflow rises.

(Question 25) Option (2)

When domestic investment opportunities are more attractive, capital outflow falls (and capital inflow may rise), so net capital outflow (= Capital outflow - Capital inflow) becomes negative. Since Net capital outflow equals Net exports, it leads to negative net exports.

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