In Which of the Following Cases Would It Necessarily Be

question 89

Multiple Choice

In which of the following cases would it necessarily be true that national saving and private saving are equal for a closed economy?

• A)Private saving is equal to government expenditures.
• B)Public saving is equal to investment.
• C)After paying their taxes and paying for their consumption,households have nothing left.
• D)The government's tax revenue is equal to its expenditures.

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Definitions:

Required Return

The expectancy of financial gain on an investment, considering its risk profile, set by investors as a benchmark.

Dividend Irrelevance Theory

A theory suggesting that dividend policy has no effect on a company's value or its stock price.

Firm's Value

The total monetary value of a company, typically assessed through metrics like market capitalization, enterprise value, or net asset value.

Cost of Capital

The rate of return that a company must earn on its project investments to maintain its market value and attract funds.