LOS 20 G:

exports - imports = private savings + government savings - domestic investment

Intuition is that low private or government savings in relation to private investment in domestic capital requires foreign investment in domestic capital.

I don’t really understand this–If there is high private investment in domestic capital, why is foreign investment in domestic capital required as well?

Not sure what the big deal is. But first and foremost, if the formula doesn’t make sense, you should be thinking about the math. Basically you have your Keynesian formula:

Y=C+I+G- IM+X

GDP= Consumption + Investment+Goverment Spending - Imports +Exports

And you have your Private Savings Formula:

S = (Y-T)-C

Private Savings(S) = Disposible income(total income-taxes)-Consumption©

Rewrite Private savings formula as a function of Y and subsitute into Keynesian Formula, solving for Net Exports (X-IM)

X-IM=S+(T-G)-I

So now you have Net Exports(Imports-Exports) =Private Savings +(Taxes-Government Spending) - Investment

Whereby (Taxes-Government Spending)= Government Savings