If Domestic Saving Is Less Than Domestic Investment, Then Investment

question 102

Multiple Choice

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

• A) an inflation tax.
• B) nothing-it cannot be done.
• C) higher interest rates.
• D) foreign saving.
• E) printing more money.

---

Definitions:

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor.

Direct Costing

A costing method where only variable manufacturing costs are assigned to inventory and cost of goods sold, with fixed manufacturing overhead treated as a period cost.

Variable Costing

An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of goods sold, with fixed overhead costs treated as period expenses.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including both materials and labor costs.