In a Closed Economy, How Does National Saving Compare with Investment

question 125

Multiple Choice

In a closed economy, how does national saving compare with investment?

• A) National saving is usually greater than investment.
• B) National saving is equal to investment.
• C) National saving is usually less than investment because of the leakage of taxes.
• D) National saving is usually less than investment.

Differentiate between the substitution effect and the income effect.

Understand the role and perception of labor unions in different international contexts.

Grasp the concepts and strategies of international businesses, including direct foreign investment, exporting, and licensing.

Recognize the dimensions of national culture identified by scholars like Geert Hofstede and their impact on international business operations.

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Definitions:

Perpetual Inventory Method

An inventory management system where updates are made continuously as inventory items are purchased and sold, providing real-time inventory levels.

General Journal Entry

A record in the general journal that represents the detailed listing of a company's financial transactions.

Terms 2/10, N/30

Payment terms indicating a 2% discount if the amount is paid within 10 days; otherwise, the net (full) amount is due within 30 days.

Perpetual Inventory Method

An accounting method that continuously tracks inventory levels and cost of goods sold, updating the accounts after each transaction.