If We Observe an Economy in Which Desired Saving Has

question 46

Multiple Choice

If we observe an economy in which desired saving has changed,but there has been no change in actual investment,we may infer that ________.

• A)this is a closed economy
• B)this is a large economy
• C)the world real interest rate has not changed
• D)all of the above
• E)none of the above

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Definitions:

Heckscher-Ohlin Model

A model in international trade theory that explains patterns of trade between countries based on their differences in factor endowments.

Import Goods

These are products brought into one country from another for sale.

Scarce Factors

Resources that are limited in availability and are constraint to economic production.

Capital

Refers to financial assets or physical resources that are used in producing goods or providing services.