Which One of the Following Is TRUE

question 49

Multiple Choice

Which one of the following is TRUE?

• A) Saving deters economic growth, because it takes money out of circulation.
• B) Saving enables economic growth by providing for investment in the capital stock.
• C) International comparisons have found no relationship between the rate of saving and the level of per capita real GDP.
• D) Economies with sophisticated credit markets, such as the United States, have no need for saving.

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Definitions:

Marginal Cost

The cost incurred from producing one additional unit of a product or service.

Renaissance Fair

A festival that recreates the atmosphere of the European Renaissance with performances, arts, crafts, and food reflective of the time period.

Efficient Market

A market in which asset prices fully reflect all available information.

Profit Opportunities

Situations or circumstances where businesses can generate earnings that are above the normal expected returns.