A Closed Economy

question 66

Multiple Choice

A closed economy

• A) can save either by building up its capital stock or by acquiring foreign wealth.
• B) can save only by building up its capital stock.
• C) can save only by acquiring foreign wealth.
• D) cannot save either by building up its capital stock or by acquiring foreign wealth.
• E) can save by avoiding excessive imports.

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Definitions:

Labor Savings

The reduction in the amount of labor (and consequently, labor costs) necessary to perform a particular task or produce a certain amount of goods or services.

Internal Rate

Typically referring to the internal rate of return (IRR), which is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Intangible Benefits

Advantages or positive outcomes of an action that are not quantifiable in monetary terms, such as customer satisfaction or employee morale.

Required Rate

Often refers to the minimum return an investor expects to achieve from an investment.