*Assume that the level of domestic investment in a country rises, while the level of private and public saving remains unchanged. In these circumstances:
A. the rise in domestic investment will mean a higher trade deficit.
B. the rise in domestic investment will mean a higher trade surplus.
C. government borrowing will increase sharply.
D. the trade deficit will decline sharply.
Answer:A
*Assume that the level of domestic investment in a country rises, while the level of private and public saving remains unchanged. In these circumstances:
A. the rise in domestic investment will mean a higher trade deficit. B. the rise in domestic investment will mean a higher trade surplus. C. government borrowing will increase sharply. D. the trade deficit will decline sharply.
Explanation: Type: Multiple Choice