If the Government Budget Is Balanced, and Saving Is Greater

question 24

Multiple Choice

If the government budget is balanced, and saving is greater than investment, then the

• A)current account must be in surplus.
• B)current account must be in deficit.
• C)current account balance must be zero.
• D)capital account must be in surplus.

---

Definitions:

Accounting Profit

The net income of a business as calculated by subtracting total expenses from total revenues, according to standard accounting principles.

Economic Profit

The difference between the total revenue generated by a business and the total opportunity costs of all resources used.

Economic Profit

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs, representing excess return over opportunity costs.

Rate of Return

The gain or loss on an investment over a specified time period, expressed as a percentage of the investment's initial cost.