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  • Card 10 / 16:
    If domestic investment increases, and there is no change in the amount of private and public saving, what must happen to the size of the trade deficit?

    The trade deficit must increase. To put it another way, this increase in investment must be financed by an inflow of financial capital from abroad.

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Source:  OpenStax, Principles of macroeconomics for ap® courses. OpenStax CNX. Aug 24, 2015 Download for free at http://legacy.cnx.org/content/col11864/1.2
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