Which of the Following Reflects an Accurate Economic Chain of Events

question 175

Multiple Choice

Which of the following reflects an accurate economic chain of events?

• A) Investment finances savings,which causes the economy to shrink.
• B) Savings finances investment,which allows the economy to grow from a larger capital stock.
• C) Savings finances future consumption,which allows future production to increase from a larger capital stock.
• D) Investment finances future consumption,which allows incomes-and thus savings-to grow.
• E) Higher interest rates increase savings,which causes consumption smoothing.

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Definitions:

Franchisor

The party in a franchising agreement that owns the overarching company, trademarks, and products, granting the right to operate a franchise.

Trademark

A distinctive mark, word, design, picture, or arrangement that is used by a producer in conjunction with a product and tends to cause consumers to identify the product with the producer.

Personal Liability

The legal responsibility of an individual to cover debt or damages arising from their actions.

Partnership

A business entity legally formed by two or more individuals who collaborate in managing the enterprise and sharing its financial gains.