For an open economy, the equation Y = C + I + G + NX is an identity. If we define national saving, S, as the total income in the economy that is left after paying for consumption and government purchases, then for an open economy, it is true that

An economy's capital stock is increased when individuals and institutions use savings to increase capital investment in stocks and bonds

Indicate whether the statement is true or false

Consider the two graphs above. Suppose that firms are able to use inventories as collateral for low-interest loans. This would ________ the desired level of inventories, as depicted in graph ________

A) increase; B B) increase; A C) decrease; B D) decrease; A