There Is an Intimate Relationship Between a Country's BCA and How

There is an intimate relationship between a country's BCA and how the country finances its domestic investment and pays for government expenditures. This relationship is given by BCA ≡ X - M ≡ (S - I) + (T - G) . Given this, which of the following is a true statement?

A) If (S - I) < 0, it implies that a country's domestic savings is insufficient to finance domestic investment.
B) If (T - G) < 0, it implies that a country's tax revenue is insufficient to finance government spending.
C) When BCA is negative, it implies that government budget deficits an/or part of domestic investment are being finance with foreign-controlled capital.
D) All of the above are true

Correct Answer:

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