Author Question: In March 2008, the Fed announced that primary dealers would be eligible to receive discount loans. ... (Read 88 times)

Mr. Wonderful · **on:** Jun 29, 2018

In March 2008, the Fed announced that primary dealers would be eligible to receive discount loans.

Indicate whether the statement is true or false

Question 2

If you know that a country's net foreign investment is positive, what does that tell you about the relationship between the country's national saving and private investment? (Assume that the capital account is zero and net transfers are zero.)

What will be an ideal response?

Dominic · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

TRUE

Answer to Question 2

For any country, national saving must equal investment, where investment is the sum of domestic private investment and net foreign investment (S = I + NFI). Rearranging the saving and investment equation, NFI = S - I, so that if a country has positive net foreign investment, it must be saving more than it is investing domestically.