If all government budgets are balanced, and S is greater than I, then A) the net

Question

If all government budgets are balanced, and S is greater than I, then A) the net international investment position must be positive. B) the financial account must be negative. C) the net international investment position must be negative. D) the financial account must be positive. The difference between GNP and GDP is A) GNP includes exports and imports. B) GNP excludes exports and imports. C) GNP includes income received from abroad and excludes income paid abroad. D) GNP excludes income received from abroad and includes income paid abroad. Typically, the most important determinant of private investment in an economy is A) the amount of domestic savings. C) the inflow of foreign investment. B) the size of the capital account surplus. D) the size of the current account deficit. ) During the 1990s, which of the following did NOT occur? A) Private savings was greater than investment for most of the 1990s. B) The United States received capital inflows. C) Investment rose. D) Private savings fell.

Explanation / Answer

Ans:

1) Option B

the financial account must be negative

Financial accounts covers claims on or liabilities to nonresidents with regard to financial assets.when S is greater then I,the financial account must be negative.

2) Option C

GNP includes income received from abroad and excludes income paid abroad.

GDP is the market value of all final goods and services produced in an economy and reflect the national output and income of an economy. But GNP also takes into account net income receipts from abroad and measures the economic strength.

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