If Domestic Saving Is Less Than Investment in an Open

question 111

Multiple Choice

If domestic saving is less than investment in an open economy, the result is most likely to be:

• A) a current account surplus.
• B) a capital account deficit.
• C) a current account deficit.
• D) a balanced current account.

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Definitions:

Families' Budgets

Financial plans created by families to manage their income, expenses, savings, and investments over a specific period.

Demand Elastic

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with high elasticity indicating a significant response.

Demand Inelastic

Describes a situation where the quantity demanded of a good or service is relatively unaffected by changes in its price.

Price Elasticity

A formula that calculates the demand's sensitivity to the good's price variations.