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The question is worded in a confusing manner (aren’t they all).
Decreasing a country’s trade deficit means increasing exports OR reducing imports. (x-m)↑
Increasing domestic saving relative to domestic investment, (S-I)↑, either means:
- Increasing domestic savings, which means people are spending less, therefore reducing imports.
- Reducing domestic investment, which means less capital inflow from abroad.
All other factors equal, either will result in an increase in the trade balance (x-m).
The equation you cited also corresponds to this:
(x-m)= (S-I) + (T-G)
Where:
- X=exports
- M=imports
- S=domestic saving
- I=investment spending
- T=taxes
- G=government spending
So if (x-m)↑, (S-I)↑.