The Fact That the Observed Link Between Saving and Investment

question 59

Multiple Choice

The fact that the observed link between saving and investment in Canada's open economy is weak implies that policies like the Registered Retirement Savings Plan (RRSP) may stimulate

• A) savings and will necessarily produce higher economic growth.
• B) savings and higher average labour productivity growth.
• C) savings but will not necessarily produce higher rates of investment.
• D) investment but will not necessarily produce higher private savings.
• E) investment but will not necessarily produce higher public savings.

---

Definitions:

Treasury Stock

Shares of a company’s own stock that it has reacquired and holds in its treasury.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the ownership interest of shareholders.

Financial Statements

Compiled financial data reports that reflect a company's financial condition, performance, and cash flow, including balance sheet, income statement, and statement of cash flows.

Retained Earnings

The cumulative amount of net income earned by a company that is kept or retained within the company for future use, rather than being paid out as dividends.