There Is an Intimate Relationship Between a Country's BCA and How

question 13

Multiple Choice

There is an intimate relationship between a country's BCA and how the country finances its domestic investment and pays for government expenditures.This relationship is given by BCA $\equiv$ X - M $\equiv$ (S - I) + (T - G) .Given this,which of the following is a true statement?

• A)If (S - I) < 0, it implies that a country's domestic savings is insufficient to finance domestic investment.
• B)If (T - G) < 0, it implies that a country's tax revenue is insufficient to finance government spending.
• C)both a) and b) are true
• D)none of the above

---

Definitions:

Duties

Obligations or responsibilities imposed on individuals or entities by law, contract, or morally expected roles.

Original Principal

The initial amount of money borrowed or invested, before the addition of interest or profits.

Principal's Instructions

Guidelines or orders given by a principal to an agent detailing how to perform specific tasks or duties.

Agent's Authority

The scope of power given to an agent to act on behalf of a principal in legal or business matters.