The Uses-Of-Saving Identity Shows That If the Government Budget Deficit

question 17

Multiple Choice

The uses-of-saving identity shows that if the government budget deficit rises,then one of the following must happen.

• A)Private saving must rise, investment must fall, and/or the current account must fall.
• B)Private saving must rise, investment must fall, and/or the current account must rise.
• C)Private saving must rise, investment must rise, and/or the current account must fall.
• D)Private saving must fall, investment must rise, and/or the current account must rise.

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Definitions:

Suppliers

Entities or individuals that provide goods or services to consumers, businesses, or other organizations.

Good

A physical item that is produced and can be offered to the market to satisfy a want or need.

Market Price

The price of a commodity when sold in a given market, determined by supply and demand dynamics.

Market

A venue where buyers and sellers interact to trade goods, services, or financial instruments.