In a Large Open Economy Like the United States,an Increased

question 107

Multiple Choice

In a large open economy like the United States,an increased government budget deficit which reduces national saving

• A)reduces investment and improves the current account balance.
• B)reduces investment and reduces the current account balance.
• C)has no effect on investment, but reduces the current account balance.
• D)has no effect on either investment or the current account balance.

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Definitions:

Total Amount

The complete sum or quantity of something, often referring to the total money involved in a transaction.

Pareto Efficient

A condition in which no individual's situation can be improved without worsening the situation of another individual.

Public Good

A product or service that is provided without profit to all members of a society, either by the government or a private individual or organization.

Private Good

A product or service that is consumed by an individual and cannot be used or consumed by others once it is purchased.