In a Closed Economy, Private Saving Equals

question 48

Multiple Choice

In a closed economy, private saving equals:

• A) Y - C - G.
• B) Y - T - C.
• C) Y - I - C.
• D) Y - T.

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Definitions:

Discount Rate

The interest rate charged to commercial banks and other depository institutions for loans received from a country's central bank's discount window; also the rate used to discount future cash flows in discounted cash flow analysis.

Project Risk

The potential for losses or less-than-expected outcomes in a specific project, due to factors such as cost overruns, underperformance, or delays.

Funding Sources

Various origins of capital used to start or expand a business, including debt financing, equity financing, and internal funds.

Cost of Capital

The cost of capital is the rate of return a company must earn on its investments to maintain its market value and attract funds, including the cost of equity and debt.