Question

For a given amount of US national saving an increase in u.s. net capital outflow decreases us domestic investment true or false

Answer 1

An increase in U.S. net capital outflow decreases U.S. domestic investment.

Step-by-step explanation:

True.

According to the national saving and investment identity, an increase in U.S. net capital outflow will decrease U.S. domestic investment, assuming that other factors remain constant.

For example, if there is a higher net capital outflow from the U.S., it means that more domestic savings are being invested in foreign countries rather than in the U.S. This leads to a decrease in the amount of domestic savings available for domestic investment and thus decreases U.S. domestic investment.