A Factor That Limits the Amount of Saving in Developing

question 258

Multiple Choice

A factor that limits the amount of saving in developing countries is the fact that

• A)the banking system does not encourage saving.
• B)there is too much foreign aid, so savings is not needed.
• C)the level of aggregate domestic output is low.
• D)the government controls financial institutions and makes it difficult for people to save.

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Definitions:

Prepaid Expenses

Costs paid for in advance of receiving the benefit, such as insurance or rent, which are recorded as assets initially.

Free Cash Flow

The amount of cash a company generates after accounting for capital expenditures, indicating the ability to repay creditors or pay dividends and interest to investors.

Accounts Payable Balance

The total amount of money owed by a company to suppliers for goods and services purchased on credit.

Payments To Suppliers

Money transferred to suppliers for goods or services received.