Chapter 26 (B)

82. In a closed economy, national saving equals

• A.investment.
• B.income minus the sum of consumption and government expenditures.
• C. private saving plus public saving.
• D.All of the above are correct.

83. In a closed economy, national saving is

• A.usually greater than investment.
• B.equal to investment.
• C. usually less than investment because of the leakage of taxes.
• D.always less than investment.

84. In a closed economy, what remains after paying for consumption and government purchases is

• A.national disposable income.
• B.national saving.
• C. public saving.
• D.private saving.

85. In a closed economy, what does (T – G) represent?

• A.national saving
• B.investment
• C. private saving
• D.public saving

86. In a closed economy, what does (Y – T – C) represent?

• A.national saving
• B.government tax revenue
• C. public saving
• D.private saving

95. In a closed economy, private saving is

• A.the amount of income that households have left after paying for their taxes and consumption.
• B.the amount of income that businesses have left after paying for the factors of production.
• C. the amount of tax revenue that the government has left after paying for its spending.
• D.always equal to investment.

96. In a closed economy, public saving is the

• A.amount of income that households have left after paying for taxes and consumption.
• B.amount of income that businesses have left after paying for the factors of production.
• C. amount of tax revenue that the government has left after paying for its spending.
• D.sum of the A, B, and C.

97. Which of the following is not always correct in a closed economy?

• A.National saving equals private saving plus public saving.
• B.Net exports equal zero.
• C. Real GDP measures both income and expenditures.
• D.Private saving equals investment.

98. If the tax revenue of the federal government exceeds spending, then the government

• A.runs a budget deficit.
• B.runs a budget surplus.
• C. runs a national debt.
• D.will increase taxes.

99. A budget surplus is created if

• A.the government sells more bonds than it buys back.
• B.the government spends more than it receives in tax revenue.
• C. private savings are greater than zero.
• D.None of the above are correct.