*A country’s current national savings and investment identity is expressed in algebraic terms as I – S – (T – G) = (M – X). Assume that the level of domestic savings rises, while the level of domestic investment and private saving remains unchanged. In this instance:
A. less foreign financial capital is required to meet investment needs.
B. government policy will involve increasing private savings.
C. the country’s trade deficit will decline.
D. all of the above
Answer:D
*A country’s current national savings and investment identity is expressed in algebraic terms as I – S – (T – G) = (M – X). Assume that the level of domestic savings rises, while the level of domestic investment and private saving remains unchanged. In this instance:
A. less foreign financial capital is required to meet investment needs. B. government policy will involve increasing private savings. C. the country’s trade deficit will decline. D. all of the above
Explanation: Type: Multiple Choice