Which of the Following Reflects an Accurate Economic Chain of Events

question 175

Multiple Choice

Which of the following reflects an accurate economic chain of events?

• A) Investment finances savings,which causes the economy to shrink.
• B) Savings finances investment,which allows the economy to grow from a larger capital stock.
• C) Savings finances future consumption,which allows future production to increase from a larger capital stock.
• D) Investment finances future consumption,which allows incomes-and thus savings-to grow.
• E) Higher interest rates increase savings,which causes consumption smoothing.

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Definitions:

Compliance Programs

Structured plans implemented by organizations to ensure adherence to legal, ethical, and regulatory standards and requirements.

Terrestrial Planets

Our solar system’s four inner planets, which have solid rocky surfaces and include Mercury, Venus, Earth, and Mars; syn. inner planets.

Planetary Rings

The rings of ice, rock, and dust that orbit some planets outside their atmospheres, the most famous of which are the rings of Saturn.

Outer Planets

The planets in the Solar System located beyond the asteroid belt, typically referring to Jupiter, Saturn, Uranus, and Neptune.