In an Economy Where Net Exports Are Zero, If Saving

question 185

Multiple Choice

In an economy where net exports are zero, if saving rises in some period, then in that period

• A)consumption and investment fall.
• B)consumption falls and investment rises.
• C)consumption rises and investment falls.

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Definitions:

Debit

An accounting entry that increases asset or expense accounts or decreases liability, equity, or revenue accounts.

Credit

A financial arrangement where a borrower receives something of value now and agrees to repay the lender at a later date, generally with interest.

Double-entry System

An accounting system where every transaction is recorded in at least two accounts, with debits equaling credits, ensuring the accounting equation is always in balance.

Revenues

The total income generated from the sale of goods and services before any expenses are subtracted.