Suppose the World Economy Is Divided into Two Halves

question 70

Multiple Choice

Suppose the world economy is divided into two halves.In Region A,all economies experience a decrease in desired saving,while desired saving is unchanged in Region B.If there is open trade and perfect capital mobility across the two regions,which of the following is true?

• A)Actual saving in Region B has increased.
• B)Actual investment in Region A has increased.
• C)Region A's imports from Region B have decreased.
• D)all of the above
• E)none of the above

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Definitions:

Declarative Memory

A type of long-term memory that involves the conscious recall of facts and events.

Self-Referent

The reference to oneself or making something relate directly to oneself.

Encoding

The initial stage of memory processing, where information is converted into a format that can be stored in the brain.

Elaboration

The addition of more detail or information to something, often to clarify or enhance understanding.