Which of the Following Statements Is Not True About the Relationship

question 2

Multiple Choice

Which of the following statements is not true about the relationship between national saving, investment, and net capital outflow?

• A) An increase in saving associated with an equal increase in net capital outflow leaves domestic investment unchanged.
• B) For a given amount of saving, an increase in net capital outflow must decrease domestic investment.
• C) For a given amount of saving, a decrease in net capital outflow must decrease domestic investment.
• D) Saving is the sum of investment and net capital outflow.

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Definitions:

Politicians

Individuals involved in politics, especially those holding or seeking office in government.

Fiscal Policy

Government policy relating to taxation and spending, used to influence economic conditions.

Lyndon B. Johnson

The 36th President of the United States, known for his Great Society social service programs and significant role in the Vietnam War.

Tax Cut

A reduction in the amount of taxes imposed by the government on individuals or businesses, often aimed at stimulating economic growth.