If an Increase in the Budget Deficit Reduces National Saving

question 24

Multiple Choice

If an increase in the budget deficit reduces national saving and investment, we have witnessed a demonstration of

• A) intermediation.
• B) equity finance.
• C) crowding out.
• D) the investment fund effect.

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Definitions:

Korsakoff's Syndrome

A chronic memory disorder often caused by severe deficiency of thiamine (vitamin B1), usually due to long-term alcohol abuse.

Vitamin B-1

Thiamine, known as Vitamin B-1, is essential for glucose metabolism and plays a critical role in nerve, muscle, and heart function.

Corpus Callosum

A broad band of nerve fibers joining the two hemispheres of the brain, facilitating communication between them.

Confabulation

The production of fabricated, distorted, or misinterpreted memories about oneself or the world, without the conscious intention to deceive.