If National Saving Decreases

question 210

Multiple Choice

If national saving decreases

• A)the sum of domestic investment and net exports must increase.
• B)the sum of domestic investment and foreign investment must increase.
• C)the sum of domestic investment and foreign investment must decrease.
• D)foreign investment must increase to cover the loss.

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Definitions:

Constant Cost

An economic scenario where the cost of producing an additional unit of a good or service remains unchanged, regardless of the scale of production.

Equilibrium Quantity

The quantity of goods supplied is equal to the quantity demanded at a given price level.

Equilibrium Price

The price at which the quantity of a good supplied equals the quantity demanded, resulting in no surplus or shortage in the market.

Zero Economic Profit

A situation where a firm's total revenues exactly equal its total costs, indicating no above-normal profit.