If the Government Budget Is Balanced, and Saving Is Greater

question 24

Multiple Choice

If the government budget is balanced, and saving is greater than investment, then the

• A)current account must be in surplus.
• B)current account must be in deficit.
• C)current account balance must be zero.
• D)capital account must be in surplus.

---

Definitions:

Firm

A business organization, such as a corporation or partnership, that sells goods or services for profit.

Marginal Revenue

The enhanced earnings from selling an additional unit of a product or service.

Pure Competition

A market structure characterized by a large number of firms, all producing identical products, and no single firm has any influence over market price.

Extra Unit

The additional quantity of a product or service that is produced or provided.