5. In a CLOSED economy, national saving equals which of the following? A. income

ID: 1141500 • Letter: 5

Question

5. In a CLOSED economy, national saving equals which of the following?

A. income plus the sum of consumption and government expenditures

B. income minus the sum of consumption and government expenditures

C. GDP plus consumption expenditures

D. GDP minus consumption expenditures

6.) Suppose the current market interest rate for loanable funds is below the equilibrium level. Which of the following best describes this situation?

A. There is a shortage of loanable funds

B. There is a surplus of loanable funds

C. There is a shortage of loanable funds

D. There is a surplus of loanable funds

7. Suppose that Congress were to introduce a new investment tax credit. What would happen in the market for loanable funds?

A. The demand for loanable funds would shift left, and interest rates would fall.

B. The demand for loanable funds would shift right, and interest rates would rise.

C. The supply of loanable funds would shift left, and interest rates would rise.

D. The supply of loanable funds would shift right, and interest rates would fall.

5. ANSWER:B income minus the sum of consumption and government expenditures

In a closed economy Y=C+I+G.

National savings is the amount of money that is not consumed or spent by the government therefore

National Savings= Y - G - C

6) A. There is a shortage of loanable funds

When interest rate is low, investors want more of economy's output eventually the demand exceeds the supply.

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.