If National Saving Increases,________

question 232

Multiple Choice

If national saving increases,________.(Assume that the capital account is zero and net transfers are zero.)

• A)the sum of domestic investment and net exports must decrease
• 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 decrease to cover the gain

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Definitions:

Absorption Costing Income

The profit figure calculated under absorption costing, including all costs of production – both fixed and variable – in product costs, affecting reported income.

Overproduction

The production of goods in quantities exceeding the demand, often leading to excess inventory and potential financial losses.

Evaluating

The process of assessing or examining something with the possible intent of instituting change based on that assessment.

Unit Costs

The cost incurred to produce, store, and sell one unit of a product, calculated by dividing the total costs by the number of units produced.