Question

1. A decrease in investment spending that results from an increase in government borrowing is called

a.) a deficit

b.) a surplus

c.) a liability

d.) crowding out

 

2. In a closed economy:

a.) national saving equals net worth

b.) there are no taxes

c.) there is no interaction with other countries

d.) there is no government

 

3. If we calculate income minus taxes minus consumption, then we are left with:

a.) national saving

b.) investment

c.) public saving

d.) private saving

 

4. In the financial market, ____ are supplying the funds and ____ are demanding the funds.

a.) governments: people

b.) foreigners: banks

c.) borrowers: savers

d.) savers: borrowers