If National Saving Decreases

question 31

Multiple Choice

If national saving decreases

• A)the sum of domestic investment and net exports must increase.
• B)the sum of domestic investment and net foreign investment must increase.
• C)the sum of domestic investment and net foreign investment must decrease.
• D)net foreign investment must increase to cover the loss.

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Definitions:

Retail Inventory Method

An accounting process used by retailers to estimate inventory value by converting the retail value of inventory to a cost basis, based on the relationship between cost and retail price.

Ending Inventory

The value of goods available for sale at the end of an accounting period.

Gross Profit Method

A method of estimating the amount of ending inventory by applying the gross profit percentage to sales.

Inventory Shortage

The situation where the actual inventory on hand is less than what is recorded in the accounting records.