By External Balance, Most Economists Means

question 65

Multiple Choice

By external balance, most economists means,

• A) avoiding excessive imbalances in international payments.
• B) balance between exports and imports.
• C) balance between trade account and service account.
• D) fixed exchange rate.
• E) balance in internal transactions like full employment or stable prices.

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Definitions:

Investment Spending

Expenditure on capital goods used to produce other goods and services in the future.

Consumption Function

An economic formula representing the relationship between total consumption and gross national income.

Marginal Propensity to Save

The fraction of an increase in income that is saved by an individual or population, representing how savings change with changes in disposable income.

Consumption Function

The consumption function is an economic formula that represents the relationship between total consumption and gross national income, predicting consumer spending.