If Saving Exceeds Investment, Then the Level of GDP Will

question 101

Multiple Choice

If saving exceeds investment, then the level of GDP will

• A)increase.
• B)remain constant.
• C)decrease.
• D)rise above potential GDP.

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Definitions:

Investment Securities

Financial instruments, such as stocks or bonds, in which individuals or entities can invest with the expectation of earning a return.

Transfer

The act of moving or conveying something from one place, person, or entity to another.

Capital Surplus

The amount of equity in a company that is derived from contributions by shareholders in excess of the par value of the shares.

Par Value

The nominal or face value of a stock or bond as stated by the issuer.