Saving Is Not a Problem in the Classical Model Because

question 7

Multiple Choice

Saving is not a problem in the classical model because

• A)the classical economists assume that saving was beneficial to people for retirement.
• B)saving would be spent by consumers eventually.
• C)interest rates are flexible, and savings were channeled into investment.
• D)savers and investors are the same people.

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Definitions:

Paid in Excess

Funds received by a company over and above the par value of its stock, often recorded as additional paid-in capital on the balance sheet.

Retained Earnings

Profits that a company retains for reinvestment in its operations, rather than distributing to shareholders as dividends.

Stock Repurchases

The act of a company buying back its own shares from the marketplace, potentially to increase the value of remaining shares.

IRS

Internal Revenue Service, the U.S. government agency responsible for tax collection and tax law enforcement.