Why might a country's savings rate have a high positive correlation to its investment rate?
A) A country's gains from intertemporal trade may have been large.
B) governments' regulation to avoid inflation
C) A country's savings rate and investment rate are generally not positively correlated but rather have negative correlation.
D) governments' regulation to avoid large current account balances
E) A government has not practiced sufficient fiscal regulation.
D
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Which of the following statements is true?
A) Comparative statics is a tool that can be used in both optimization in levels and optimization in differences. B) Marginal analysis is a key tool used while optimizing in levels. C) Comparative statics involves calculating the incremental cost of moving from one alternative to the next best alternative. D) Marginal analysis is the comparison of economic outcomes before and after some economic variable is changed.
A tax may be used as a corrective device in the case of a negative externality because it will __________ marginal private costs and __________ supply.
A. increase; decrease B. increase; increase C. decrease; decrease D. decrease; increase
Define real shocks, define nominal shocks, and give an example of each
What will be an ideal response?
According to the Romer model, tax incentives to support research and development will lead to ________
A) higher tax rates in the future B) an increase in the general level of prices C) a decrease in the general level of prices D) increased per capita income