In the Open-Economy Macroeconomic Model,the Market for Loanable Funds Equates

question 104

Multiple Choice

In the open-economy macroeconomic model,the market for loanable funds equates national saving with

• A)domestic investment.
• B)net capital outflow.
• C)the sum of national consumption and government spending.
• D)the sum of domestic investment and net capital outflow.

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Definitions:

Financial Well-Being

A state of being wherein an individual or family has control over their finances, can absorb a financial shock, is on track to meet financial goals, and has financial freedom to make choices that allow them to enjoy life.

Prospect Theory

Prospect Theory is a behavioral economic theory that describes the way people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are unknown.

Status Quo Bias

The tendency most people have when making choices to select any option that is presented as the default (status quo) option. Explainable by prospect theory and loss aversion.

Behavioral Economics

A field of economics that examines how psychological, cognitive, emotional, cultural, and social factors affect economic decisions.