In Open Economies

question 41

Multiple Choice

In open economies

• A) saving and investment are necessarily equal.
• B) as in a closed economy, saving and investment are not necessarily equal.
• C) saving and investment are not necessarily equal as they are in a closed economy.
• D) saving and investment are necessarily equal contrary to the case of a closed economy.
• E) investment always refers to the domestic stock market.

Apply knowledge of accounting principles to calculate cash payments and cash receipts from operating activities using the direct method.

Analyze the impact of changes in current asset and liability accounts on cash flows.

Distinguish between noncash investing and financing activities and their reporting requirements.

Comprehend the impact of treasury stock transactions and changes in equity on the cash flows.

---

Definitions:

World War II

A global conflict that lasted from 1939 to 1945, involving most of the world's nations, including all of the great powers, eventually forming two opposing military alliances: the Allies and the Axis.

Democrats

A member or supporter of the Democratic Party in the United States, known for its liberal policies on social issues and emphasis on government intervention in the economy.

Republicans

A member of the Republican Party, one of the two major contemporary political parties in the United States, often associated with conservative and right-leaning policies.

Fair Deal

A set of proposals put forward by U.S. President Harry S. Truman to Congress in 1949 aimed at improving social welfare and civil rights.