Which of the Following Restrictions Implies That Investment Exceeds Private

question 48

Multiple Choice

Which of the following restrictions implies that investment exceeds private saving for a closed economy?

• A)The economy has no government.
• B)The economy's government is running a budget deficit.
• C)The economy's government is running a budget surplus.
• D)No restriction is necessary;investment and private saving are equal for all closed economies.

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Definitions:

Initial Endowment

The initial quantity of goods, services, assets, or resources that an individual, institution, or economy possesses.

Pareto Optimal

A situation where resources are distributed in such a manner that it's not feasible to rearrange them to benefit someone without adversely affecting at least another individual or preference standard.

Initial Endowment

The initial quantity of goods, resources, or wealth that an individual or entity possesses at the start of a period or game.

Pareto Optimal

A distribution of resources from which it is impossible to reallocate in order to make any individual better off without making at least one individual worse off.