What Will Be the Effect of an Excess of Planned

question 222

Multiple Choice

What will be the effect of an excess of planned investment over saving in a private closed economy with unemployed resources?

• A)a decline in the rate of interest
• B)an unplanned accumulation of inventories by businesses
• C)a rise in the real GDP
• D)the federal budget will automatically move toward a deficit

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Definitions:

Gain or Loss

Refers to the financial result of a transaction where assets exceed liabilities (gain) or liabilities exceed assets (loss).

Disposal

The process of getting rid of an asset or substance, which can involve selling, recycling, or throwing away.

Book Value

The net value of a company's assets, subtracting liabilities and generally expressed on a per-share basis.

Book Value

The net value of an asset reported on the balance sheet, calculated as the asset's cost minus accumulated depreciation.