In a Closed Economy, How Does National Saving Compare with Investment

question 125

Multiple Choice

In a closed economy, how does national saving compare with investment?

• A) National saving is usually greater than investment.
• B) National saving is equal to investment.
• C) National saving is usually less than investment because of the leakage of taxes.
• D) National saving is usually less than investment.

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Definitions:

Expected Income

Expected income is the income a person or entity anticipates receiving over a certain period, based on current or future economic factors.

Utility Maximizer

An economic actor who seeks to get the maximum satisfaction or utility from resources available, under the constraints faced.

Probability

The measure of the likelihood that an event will occur, often expressed as a number between 0 and 1, where 1 indicates certainty.

Premium

A premium refers to the additional amount paid for a product, service, or insurance policy over and above its basic cost.