In a Large Open Economy Like the United States,an Increased

question 75

Multiple Choice

In a large open economy like the United States,an increased government budget deficit that reduces national saving

• A)reduces investment and improves the current account balance.
• B)reduces investment and reduces the current account balance.
• C)has no effect on investment,but reduces the current account balance.
• D)has no effect on either investment or the current account balance.

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Definitions:

Total Cost Curve

A graphical representation that shows the total cost of producing different levels of output, illustrating how costs change with production volume.

Marginal Cost Curve

A graphical representation that shows how the cost of producing one additional unit of a good varies as the quantity of the good produced changes.

Average Fixed Cost Curve

A graphical representation showing the average fixed cost per unit of output, which decreases as production increases due to spreading fixed costs over more units.

Total Variable Cost Curve

A graphical representation depicting how the total variable costs of producing a good changes with the level of output.