I = S + F The equation above states that a country can increase its new capital formation (or investment) through is ?
Correct answer: A. own domestic savings and by inflows of capital from abroad
- A. own domestic savings and by inflows of capital from abroad
- B. stock market and fiscal policy
- C. savings from abroad and financial outflow
- D. savings and financial liberalization
Explanation
Investment can be financed by domestic saving plus foreign saving, represented here by capital inflows from abroad. Stock markets and financial liberalisation may affect financing, but they are not the components of this identity.
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