-Using the Data in the Above Table,if Net Exports =

question 98

Multiple Choice

$$\begin{array} { | l | c | } \hline { \text { Item } } & \begin{array} { c } \text { Billions of } \\\text { dollars }\end{array} \\\hline \text { Exports of goods and services, } X & \\\hline \text { Imports of goods and services, } M & 1,000 \\\hline \text { Net taxes, } T & \\\hline \text { Government expenditure, } G & 1,300 \\\hline \text { Saving, } S & \\\hline \text { Investment, } I & 650 \\\hline\end{array}$$
-Using the data in the above table,if net exports = -$500 billion and the government balances its budget,

• A) the private sector must balance its budget.
• B) savings must equal $150 billion.
• C) the private sector runs a surplus of $850 billion.
• D) saving must equal $650 billion.

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Definitions:

Money Creation

The process by which the money supply of a country, or of an economic or monetary region, is increased.

Depository Institutions

Financial institutions that accept deposits from individuals and provide loans, such as banks and credit unions.

Loans

Sums of money borrowed that are expected to be paid back with interest by the borrower over a specified period of time.

Discount Rate

The interest rate charged by central banks on loans they give to commercial banks and other financial institutions.