Suppose Private Saving in a Closed Economy Is $12b and Investment

question 6

Multiple Choice

Suppose private saving in a closed economy is $12b and investment is $10b.

• A)National saving must equal $12b.
• B)Public saving must equal $2b.
• C)The government budget surplus must equal $2b.
• D)The government budget deficit must equal $2b.

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Definitions:

Price Support

Government interventions or policies designed to maintain the market price of a commodity or product at a certain level.

Government Policy

Actions and strategies that governments enact to achieve economic, social, or political objectives.

Consumer Surplus

The distinction between the price consumers intend to pay for a product or service and the price they actually pay.

Government Policy

Laws, regulations, and actions taken by a government to monitor, regulate, or influence economic, social, or environmental outcomes.