If There Is a Trade Deficit, Then

question 76

Multiple Choice

If there is a trade deficit, then

• A)saving is greater than domestic investment and Y > C + I + G.
• B)saving is greater than domestic investment and Y < C + I + G.
• C)saving is less than domestic investment and Y > C +I + G.
• D)saving is less than domestic investment and Y < C + I + G.

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Definitions:

Semi-Annually Compounded

Interest or finance charges are applied to the principal sum twice a year, causing the investment or loan to grow at a faster rate than simple annual compounding.

RSP

Registered Savings Plan, a financial account in Canada designated for holding savings and investment assets, with special tax benefits for retirement savings.

Monthly Compounded

Pertains to interest or any financial metric that is calculated and added to the principal balance every month.

Nominal Rate

The stated interest rate of a bond or loan, not accounting for compounding or inflation effects.