Two Nations Are Located Next to One Another

question 17

Multiple Choice

Two nations are located next to one another.In Nation A,people are very thrifty and spend much less than their incomes; moreover,Nation A's government runs a balanced budget every year.In Nation B,people spend all of their income,but their government runs consistent deficits.Thus:

• A) Nation A's extra savings would increase the supply of loanable funds to Nation B.
• B) Nation B's government deficit would be a supply of loanable funds to Nation B.
• C) Nation A's extra savings would increase the demand for loanable funds in Nation B.
• D) Nation B would instantly default on all of its debt obligations.
• E) Nation A's extra savings would decrease the supply of loanable funds to Nation B.

---

Definitions:

Sophisticated Play

Complex and imaginative play that involves advanced thinking, creativity, and social interactions.

Intelligence

The ability to learn, understand, and apply knowledge, solve problems, and adapt to new situations.

Pictorial Competence

The ability to understand and interpret images, drawings, and visual representations effectively.

Symbolic Development

The process by which individuals learn to use symbols, such as words or gestures, to represent objects, actions, thoughts, and ideas beyond their immediate experience.