Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Question
Chapter 22, Problem 6MCQ
To determine
The correct option for basic accounting fact that the level of investment for the economy as a whole.
Expert Solution & Answer
Answer to Problem 6MCQ
From the available options, the correct option is saving.
Explanation of Solution
The basic accounting fact shows that the level of investment for the whole economy must be equal to the level of saving because investments are financed or made from savings.
Therefore, the correct option is e (savings) and all other options are incorrect because capital inflows and outflows do not finance the investment. And, wealth and financial assets are not in liquid form of finance that cannot always be used for investment.
Economics Concept Introduction
Introduction: Financial system refers to a set of financial institutions that offers the exchange of funds, insurance, and deposits such as banks, insurance companies, etc.
Chapter 22 Solutions
Krugman's Economics For The Ap® Course
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