In a Closed Economy, Public Saving Is the Amount of

question 97

Multiple Choice

In a closed economy, public saving is the amount of

• A)income that households have left after paying for taxes and consumption.
• B)income that businesses have left after paying for the factors of production.
• C)tax revenue that the government has left after paying for its spending.
• D)spending that the government undertakes in excess of the taxes it collects.

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Definitions:

Incremental Analysis

A decision-making technique that evaluates the financial consequences of making one more unit of a product or entering a new market.

Relevant Costs

Those costs and revenues that differ across alternatives.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Costs

Costs that change in proportion to the level of production or business activity.