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

question 28

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 ≡ X - M ≡ (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

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Definitions:

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Gustav Le Bon

was a French social psychologist best known for his work on crowd psychology, explaining how an individual's behavior in a crowd differs from their behavior alone.

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