The Saving Rate in the United States Fell to Nearly

question 38

Multiple Choice

The saving rate in the United States fell to nearly zero in the early 2000s.One of the contributing factors to this development was the

• A)decrease in consumer confidence in the late 1990s.
• B)declining real incomes of most American households.
• C)increased housing wealth.
• D)rising real interest rates in the United States.

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Definitions:

Equity Capital

Funds raised by a company through the sale of shares in return for ownership interest, without obligation to repay the investment.

Issuing Bonds

The act of a corporation or government raising capital by borrowing from investors through the sale of bond securities.

Reinvesting Earnings

The practice of using a company's profits to invest back into the business to fund growth, expansion, or improvements rather than distributing it to shareholders as dividends.

Strategic Plan

A document that outlines an organization's long-term goals and the strategies it will use to achieve them.