Suppose That in China, Investment Is $400 Billion, Saving Is

question 57

Multiple Choice

Suppose that in China, investment is $400 billion, saving is $400 billion, tax revenues are $500 billion, exports are $300 billion, and imports are $200 billion. The government budget ________ the supply of loanable funds, which ________ the real interest rate and ________ investment.

• A)surplus increases; lowers; decreases
• B)surplus decreases; raises; increases
• C)surplus increases; lowers; increases
• D)deficit decreases; raises; decreases
• E)surplus increases; raises; decreases

---

Definitions:

Reliability

The degree to which an assessment tool produces stable and consistent results across multiple measurements.

Validity

The extent to which a test or instrument measures what it is supposed to measure.

Predictive Validity

The extent to which a score on a scale or test predicts future performance on a related outcome.

Culture Bias

The tendency to interpret or judge phenomena by standards inherent to one's own culture, potentially leading to misunderstanding or prejudice.