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:

Full Capacity Sales

The maximum potential sales revenue a company can achieve with its current resources and facilities, assuming full efficiency.

Net Income

A measure of a company's profitability, calculated as revenue minus expenses, taxes, and costs.

Fixed Assets

Tangible assets expected to be used in business operations for a period longer than one year, such as equipment, real estate, and vehicles.

Full Capacity Sales

Full Capacity Sales represent the maximum sales level a company could achieve utilizing its available capacity without incurring additional capital expenses.