Japan has a fairly high saving rate and the level of saving in Japan is above domestic investment. Use the saving and investment equation to explain what Japan is doing with this excess of saving above domestic investment
What will be an ideal response?
In an open economy, the saving and investment equation implies that a country's national saving must always equal domestic investment plus net foreign investment or (S = I + NFI). Japan's saving in excess of domestic investment implies that net foreign investment is positive for Japan so that Japan must be investing in other countries. Companies like Toyota, Honda, and Nissan have built plants in the United States.
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The long run is distinguished from the short run because only in the long run
A) output prices can vary. B) factor of production prices can vary. C) the quantities of all factors of production can be varied. D) the firm no longer maximizes its profit.
Based on Figure 6.1, suppose the government puts a tariff of $0.25 per bushel on soybean imports. How much will the tariff reduce imports?
A) Imports will decrease by 10 million bushels. B) Imports will decrease by 20 million bushels. C) Imports will decrease by 60 million bushels. D) Imports will not change after the tariff.