nglearning.com/ibiscms/mod/ibis/view.php?id=4272 788 ning estion 55 of 76 Mapdo

Question

nglearning.com/ibiscms/mod/ibis/view.php?id=4272 788 ning estion 55 of 76 Mapdo Sapling Learning Based on the National Savings and Investment Identity, categorize each scenario, according to category is directly affected Private Savings Inflow of Foreign Capital Private Investment Government Budget Deficit Mitchelil loses worker contrbutes Exports of cars decrease A company builds a factory his job Taxes increase to a retirement fund A family cuts down on expenses The builds a bridge Imports of French A farmer buys a tractor wine increase Previous Nxt Sawe And Ext search

Explanation / Answer

(1) Private savings are affected when

- Michael loses his job (income falls and savings fall)

- Worker contributes to retirement fund (savings rise)

- Family cuts back on expenditure (lower consumption will raise savings ceteris paribus)

(2) Inflow of foreign capital are affected when

- Exports of car decrease (Current account balance falls, so capital account balance (inflow of foreign capital) rises)

- Imports of wine increase (Current account balance falls, so capital account balance (inflow of foreign capital) rises)

(3) Private investment are affected when

- Company builds factory

- Farmer buys tractor

(2) Government budget deficit is affected when

- Taxes increase (budget deficit falls)

- Government builds bridge (budget deficit rises)

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