Which of the Following Statements Is (Are)correct? According to the Feldstein-Horioka

question 35

Multiple Choice

Which of the following statements is (are) correct? According to the Feldstein-Horioka Saving Investment Puzzle

• A)countries with relatively low saving to income ratios have relatively high investment to income ratios.
• B)there is no correlation between investment and saving in developed countries.
• C)countries with a high ratio of saving to income have high ratios of investment to income.
• D)Both a and b

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Definitions:

Marginal Costs

The incremental cost associated with the production of one more unit of a service or product.

ATC

Average Total Cost, the sum of all production costs divided by the quantity of output produced, representing the per-unit cost of production.

AVC

Average Variable Cost, which is the total variable costs of production divided by the quantity of output produced.

Marginal Cost

The increase in total cost that arises from producing an additional unit of a good or service.