The Equation NX = S + (TA - G -

question 41

Multiple Choice

The equation NX = S + (TA - G - TR) - I implies that

• A)there is always a close correlation between the government budget deficit and the trade deficit
• B)if national saving increases relative to domestic investment, the trade deficit will decrease
• C)a reduction in the government budget deficit is likely to raise the level of saving and/or worsen the trade deficit
• D)an increase in government spending will stimulate exports
• E)a tax decrease can help to create a trade surplus

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Definitions:

Economic Value Added

A financial performance metric that calculates the value a company generates from its capital investments, beyond the cost of capital.

Weighted Average Cost Of Capital

The overall rate of return that a company is expected to pay on average to all its security holders to finance its assets.

Market Value Of Equity

The total dollar value of a company's shares of stock on the open market.

Employee Absenteeism

The habitual non-presence of an employee at work, which can affect productivity and operational efficiency.