A. gets the highest rate of interest
B. maximizes the level of long-run investment
C. maximizes the level of long-run consumption
D. maximizes human capital
Related Mcqs:
- National Saving (or just saving) is equal to ?
A. none of these answers
B. investment + consumption expenditures
C. private saving + public saving
D. GDP government purchases - In the neoclassical theory of growth a higher saving rate leads to ?
A. a higher growth rates
B. a fluctuating growth rate
C. a fluctuating growth rates
D. no change in the growth rate - The growth path resulting from technological progress for a given saving rate is known as the ?
A. Steady state growth path
B. Steady state invention rate
C. Steady state level of output
Unsteady state growth path - Due to Japan’s high saving rate, suppose that the Japanese invest abroad. This investment may result in a/an _______ of the Japanese yen and therefore a for Japan?
A. appreciation; trade surplus
B. appreciation; trade deficit
C. depreciation; trade surplus
D. depreciation; trade deficit - For the United States suppose the annual interest rate on government securities equals 8 percent while the annual inflation rate equals 4 percent, For Switzerland the annual interest rate on government securities equal 10 percent while the annual inflation rate equals 7 percent the above variables would cause investment funds to flow from ?
A. the United States to Switzerland causing the dollar to depreciate
B. the United States to Switzerland causing the dollar to appreciate
C. Switzerland to the United States causing the franc to depreciate
D. Switzerland to the United States causing the franc to appreciate - For the United States suppose the annual interest rate on government securities equals 12 percent while the annual inflation rate equals 8 percent For Japan the annual interest rate on government securities equals 10 percent while the annual inflation rate equals 5 percent the above variables would cause investment funds to flow from ?
A. The United States to Japan causing the dollar to depreciate
B. The United States to Japan causing the dollar to appreciate
C. The Japan to United States, causing the dollar to depreciate
D. The Japan to United States, causing the dollar to appreciate - If saving exceeds investment the national income will ?
A. Fall
B. Rise
C. Fluctuate
D. Remain constant - If a result of households wish to save more there is a change in equilibrium income and no change in equilibrium saving this is an example of ?
A. market imperfection
B. the law of diminishing returns
C. the paradox of thrift
D. market failure - If the Supply of loanable funds is very inelastic (steep) Which policy would likely increase saving and investment the most ?
A. a reduction in the budget deficit
B. an increase in the budget deficit
C. an investment tax credit
D. None of the above - If an increase in the budget deficit reduces national saving and investment we have witnessed a demonstration of ?
A. intermediation
B. equity finance
C. crowding out
D. the investment fund effect
