In a small open economy, an increase in government spending, while taxes remain the same, will be accompanied by
A) a decrease in private investment and an increase in privates saving.
B) an increase in private investment and a decrease in private savings.
C) a decrease in national savings and an increase in foreign borrowing.
D) an increase in national savings and a decrease in foreign borrowing.
C
You might also like to view...
In a decreasing-cost industry, the entry of new firms lowers average cost at each level of output
Indicate whether the statement is true or false
Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in
a. both Mexican GDP and U.S. GDP. b. Mexican GDP, but it is not included in U.S. GDP. c. U.S. GDP, but it is not included in Mexican GDP. d. neither Mexican GDP nor U.S. GDP.
One way the government can boost the economy out of a recession is:
A. with public announcements telling the public to save their money. B. by increasing government spending. C. by setting price ceilings on most goods so people can afford them. D. None of these will help an economy in recession.
Interlocking directorates are:
A. legal if the two firms have small market shares. B. illegal under provisions of the Federal Trade Commission Act of 1914. C. illegal under provisions of the Celler-Kefauver Act of 1950. D. illegal under provisions of the Clayton Act of 1914.