1. If NX=0, then savings must be equal to invesment
Select one:
True
False
2. When the government runs a fiscal deficit, it finances it by:
a. issuing stocks
b. decreasing taxes
c. borrowing money from a commercial bank
d. issuing bonds
3. If taxes increase, then:
a. disposable income decreases
b. disposable income increases
c. consumption increases
d. private savings increase
4. Primary fiscal surplus refers to:
a. private savings
b. total
c. public savings
d. trade balance
5. Calculate Private Savings using the proper information below:
Private Consumption=€12,000
Public Spending=€5,000
Taxes= €7,000
Investment=€13,000
6. When the interest rate falls:
a. the cost of borrowing money increases
b. investment decreases
c. investment increases
d. savings increase
7. When the government runs a fiscal deficit and as a result private investment falls, this is called:
8. An economy has the following
Private Consumption=€12,000
Public Spending=€5,000
Taxes= €7,000
GDP=€30,000
Investment=€13,000
Then, Total Savings are equal to:
a. 13,000
b. 2,000
c. 11,000
d. None of the above
9. If the country is running a trade surplus, then savings must be higher than investment
Select one:
True
False
10. If NX=0, then this means that the country economy is closed
Select one:
True
False
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