Which of the following statements concerning saving is true?
A. A country's saving rate is unrelated to its growth rate.
B. A country's growth rate is unrelated to its national income.
C. An increase in the rate of saving will lead to a reduction in consumption in the short run and in the long run.
D. An increase in the rate of saving decreases gross domestic income by reducing current consumption but increases current and future gross domestic income through investment in capital goods.
Ans: D. An increase in the rate of saving decreases gross domestic income by reducing current consumption but increases current and future gross domestic income through investment in capital goods.
You might also like to view...
Refer to Figure 9-3. Without the quota, the domestic price of peanuts equals the world price which is $2.00 per pound. What is the quantity of peanuts demanded by domestic consumers in the absence of a quota?
A) 10 million pounds B) 28 million pounds C) 30 million pounds D) 40 million pounds
An individual has an initial wealth of $35,000 and might incur a loss of $10,000 with probability p. Insurance is available that charges $gK to purchase $K of coverage
What value of g will make the insurance actuarially fair? If she is risk averse and insurance is fair, what is the optimal amount of coverage?
The difference between zero accounting profit and zero economic profit is that
A. an economic profit of zero indicates a fair rate of return because it includes the opportunity cost of a firm’s capital. B. an economic profit of zero indicates an unacceptable rate of return because it does not include the opportunity cost of a firm’s capital. C. an economic profit of zero indicates more than a fair rate of return because it includes opportunity cost and explicit cost. D. an accounting profit of zero indicates a fair rate of return because it includes the opportunity cost of a firm’s capital.
Molly needs 30 minutes to wash the car and 45 minutes to mow the lawn. Renee needs 1 hour to wash the car and 2 hours to mow the lawn. Which of the following statements is correct?
a. Molly has an absolute advantage in washing the car; Renee has an absolute advantage in mowing the lawn. b. Molly has an absolute advantage in mowing the lawn; Renee has an absolute advantage in washing the car. c. Molly has an absolute advantage in both tasks. d. Renee has an absolute advantage in both tasks. e. Neither woman has an absolute advantage in washing the car.