An Open Economy with a Low Saving Rate (Private and Public)must

question 63

Multiple Choice

An open economy with a low saving rate (private and public) must have

• A)low investment only.
• B)high investment only.
• C)a trade surplus only.
• D)low investment or a trade deficit.
• E) low investment or a trade surplus.

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Definitions:

Interest Expense

The charge for borrowing money typically calculated as a rate of the principal amount annually.

Net Operating Losses

A situation where a company's operating expenses exceed its revenues, which can have tax implications and affect future earnings reports.

Debenture Bonds

Unsecured bonds that rely on the creditworthiness and reputation of the issuer for support, without specific collateral.

Treasury Stock

Refers to shares that were issued and later reacquired by the issuing corporation, reducing the amount of outstanding stock on the open market.