The Global Savings Glut Can Be Defined As

question 58

Multiple Choice

The global savings glut can be defined as:

• A)the increase in foreign savings moving into the United States in search of investment opportunities.
• B)the rapid increase in personal saving rates in the United States leading to increased lending to foreign countries.
• C)the response of U.S.savings to low interest rates in the early 2000s.
• D)the decline in saving rates globally.
• E)the precautionary savings increase in response to the establishment of the Euro.

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Definitions:

Price Floor

A government- or group-imposed limit on how low a price can be charged for a product, intended to prevent prices from dropping too low.

Shortage/Surplus

A market condition: shortage occurs when demand exceeds supply, and surplus happens when supply exceeds demand.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or resource.

Market Equilibrium

Market equilibrium is a condition where the quantity of a product supplied is equal to the quantity demanded, leading to a stable market price for the product.