Which Statement Is FALSE

question 39

Multiple Choice

Which statement is FALSE?

• A) When there is an increase in the government budget deficit, the total amount of borrowing falls.
• B) When there is an increase in private savings, the interest rate decreases.
• C) When there is an increase in the government budget deficit, private investment is crowded out.
• D) When there is an increase in private savings, the total amount of borrowing increases.

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Definitions:

Equilibrium Prices

The price at which the quantity of a good supplied is equal to the quantity demanded, leading to market balance.

Consumer Surplus

The difference in the total amount that customers are ready and financially able to invest in a good or service and the amount they truly pay.

Producer Surpluses

The difference between what producers are willing to sell their goods for and the actual price they receive.

Creative Destruction

A concept in economics implying the dismantling of long-standing practices in order to make way for innovation and advancement.