If Domestic Saving Is Less Than Domestic Investment, Then Investment

question 12

Multiple Choice

If domestic saving is less than domestic investment, then investment can be financed by:

• A) the budget deficit.
• B) foreign saving.
• C) higher interest rates.
• D) new savings instruments.
• E) higher rates of inflation.

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholders from its profits or reserves.

Primary Beneficiary

The primary beneficiary is the entity that has the controlling financial interest in a variable interest entity, and thus is the party that consolidates the entity's financial statements with its own.

Consolidation

The process of merging multiple financial statements of a parent company and its subsidiaries into a single, aggregated document for reporting purposes.

Intra-Entity Transactions

Transactions that occur between divisions or units within the same company, often used for internal accounting purposes.