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

question 56

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)When BCA is negative, it implies that government budget deficits and/or part of domestic investment are being finance with foreign-controlled capital.
• D)All of the above are true

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Definitions:

Independent Variable

A variable in an experiment or model that is manipulated to observe its effect on a dependent variable.

Dependent Variable

The variable in an experiment or study that is affected by changes in the independent variable, representing the output or outcome.

Dummy Variables

Variables created to represent categorical data with two or more categories by assigning binary values (0 or 1), allowing them to be used in regression models.

Qualitative Variables

Variables that express qualitative attributes, and are usually described by non-numeric categories or groups.