Which of the following statements is true?
A) In a closed economy, government spending equals zero.
B) A nation with a high savings rate will accumulate capital rapidly.
C) A nation with a high savings rate will accumulate capital slowly.
D) In a closed economy, aggregate consumption equals zero.
B
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Countries that borrow large amounts of money from foreign lenders prefer to:
A) hold an undervalued currency. B) hold an overvalued currency. C) have a high rate of unemployment. D) have a low rate of inflation. Suppose India borrows $10,000 from the U.S. at the beginning of 2012. The flexible exchange rate is 50 Indian rupees per dollar.
Real business cycle theorists take the comovement of aggregate output and Solow residuals as strong confirmation that economic fluctuations are caused by ________
A) changes in aggregate demand B) changes in the money supply C) changes in the rate of inflation D) productivity shocks