Question 1

If S = 200, T = 700, G = 950, and NX = -200, this makes net domestic investment

Accepted Answer

Net domestic investment is calculated as the sum of gross investment (G) minus depreciation (S + NX + T). So, 950 - (200 - 200 + 700) = 950 - 700 = 250. However, there seems to be a mistake in my calculation as none of the options match. Based on the provided options and the correct approach to calculate net domestic investment, which is G - (S + T + NX), the correct calculation should be 950 - (200 + 700 - 200) = 950 - 700 = 250. Given the options do not include 250, and assuming a possible typo in the question or answer choices, I cannot accurately determine the correct answer based on the provided formula and options.

Question 2

In the late 1980s, ________ domestic private investment led to ________ in net foreign borrowing.

Accepted Answer

The answer of In the late 1980s, ________ domestic private...

Question 3

If S = 250, T = 170, NX = -20, this makes government saving

Accepted Answer

The answer of If S = 250, T = 170,...

Question 4

In the 1980s, the United States on net ________ foreign nations so that its private firms could absorb through domestic investment ________ goods than what was being left for them by national saving.

Accepted Answer

The phrase "on net" indicates that the US borrowed more from foreign nations than it lent to them. Additionally, the sentence implies that the US was investing more domestically than what was left for them by national saving, which means they were absorbing more goods. This fits with the idea that they were borrowing more to fuel domestic investment. Therefore, A) borrowed from, more is the best choice.

Question 5

When a nation's national saving falls short of its domestic investment, it must be

Accepted Answer

If a nation's national saving falls short of its domestic investment, it means that the nation is not saving enough to finance its own investments. This indicates a deficit in the nation's capital account, which can be resolved by borrowing from foreign nations. Therefore, the correct answer is D, a net borrower from foreign nations.

Question 6

If a nation's budget deficit rises, domestic private investment can remain unchanged through some combination of ________ private saving and ________ importing relative to exporting.

Accepted Answer

When a nation's budget deficit rises, it can maintain its level of domestic private investment if there is an increase in private saving (to offset the government's increased borrowing) and a decrease in importing relative to exporting (to ensure that more capital remains within the country).

Question 7

Current account includes all of the following except:

Accepted Answer

The current account includes net exports (exports minus imports), net income from abroad (such as earnings from foreign investments), and net unilateral transfers (such as foreign aid or remittances from workers abroad). However, it does not include net regulations, as regulations are not a monetary flow between countries.

Question 8

Compared to 1960-79, U.S. net national saving form 1980-92 as a proportion of national income

Accepted Answer

Net national saving as a proportion of national income fell precipitously from 1980-92 compared to 1960-79. This is due to factors such as increased government spending, decreased personal saving rates, and a shift towards a service-based economy.

Question 9

If a country's private saving is 100 and government saving is -100, domestic private investment

Accepted Answer

Domestic private investment in this scenario would be equal to the net amount the economy borrows from other countries because the private saving (100) offsets the government deficit (-100), resulting in a net saving of 0. Therefore, any investment must be financed through borrowing from abroad.

Question 10

If S = 300, T = 800, G = 1100, and I = 150, this makes net foreign investment

Accepted Answer

The answer of If S = 300, T = 800,...

Question 11

From 2004 to 2006, the European Union budget was ________, private saving was ________ domestic investment, and foreign lending ________.

Accepted Answer

The statement mentions that "from 2004 to 2006, the European Union budget was in deficit", which eliminates options A and C. It also mentions that private saving was "less than" domestic investment, which rules out option B. Finally, it states that foreign lending was "negligible", which matches option D.

Question 12

In the current debate over fiscal policy, advocates of returning to significant budget surpluses

Accepted Answer

All the options provided reflect common arguments made by advocates of returning to significant budget surpluses. They often argue that past economic successes, such as those in the late 1990s, were due to or coincided with budget surpluses. They may also express concerns about tax cuts benefiting the wealthy disproportionately and argue that such cuts could increase the U.S.'s reliance on foreign borrowing by reducing government revenue.

Question 13

From 1980 to 1992 net national saving in the United States averaged approximately ________ percent of national income.

Accepted Answer

From 1980 to 1992, net national saving in the United States averaged approximately 4.7 percent of national income.

Question 14

From 2004 to 2006, the U.S. budget was ________, private saving was ________ domestic investment, and foreign borrowing was ________.

Accepted Answer

From 2004 to 2006, the U.S. budget was in deficit (meaning the government was spending more than it was taking in), private saving was less than domestic investment (meaning there was a shortfall in savings to finance investment), and foreign borrowing was needed to finance the deficit. Choice A accurately reflects all three of these conditions.

Question 15

Switching to a faster economic growth path comes at the cost of lower

Accepted Answer

In order to accelerate economic growth, society must allocate more resources towards investment in capital, research and development, education, and infrastructure. This means that there will be less available for present consumption, as the focus shifts towards long-term growth potential.

Question 16

From 2004 to 2006, the Japanese budget was ________, private saving was ________ domestic investment, and foreign lending ________.

Accepted Answer

From 2004 to 2006, the Japanese budget was in deficit, private saving was greater than domestic investment, and foreign lending was moderate. This period was characterized by Japan's efforts to recover from its "Lost Decade" of economic stagnation, leading to significant government spending and an increase in public debt, while the high rate of private saving exceeded domestic investment opportunities, leading to moderate levels of foreign lending.

Question 17

In 1980, the U.S. budget was ________, private saving was ________ domestic investment, and foreign borrowing was ________.

Accepted Answer

In 1980, the U.S. budget was in deficit, meaning the government spent more than it earned. Private saving was higher than domestic investment, indicating that the amount saved by individuals and corporations exceeded the amount invested within the country. Despite the budget deficit and high private savings, foreign borrowing was not needed to finance the deficit, suggesting that the deficit was managed through domestic means rather than relying on foreign loans.

Question 18

From 1988 to 1990, the U.S. budget was ________, private saving was ________ domestic investment, and foreign borrowing was ________.

Accepted Answer

From 1988 to 1990, the U.S. budget was in deficit, meaning the government was spending more than it was earning in revenue. Private saving was higher than domestic investment, indicating that individuals were saving more money than businesses were investing in the domestic economy. Foreign borrowing was still needed to finance the deficit, as the government was borrowing money from other countries to cover its spending.

Question 19

The "twin deficits" refer to government expenditures being ________ than net tax revenues at the same time as exports ________ imports.

Accepted Answer

The "twin deficits" refer to a situation where a country has both a fiscal deficit (government expenditures are greater than net tax revenues) and a trade deficit (exports are below imports) simultaneously.

Quiz 5: The Government Budget, Foreign Borrowing, and the Twin Deficits

If S = 200, T = 700, G = 950, and NX = -200, this makes net domestic investment

In the late 1980s, domestic private investment led to in net foreign borrowing.

If S = 250, T = 170, NX = -20, this makes government saving

In the 1980s, the United States on net foreign nations so that its private firms could absorb through domestic investment goods than what was being left for them by national saving.

When a nation's national saving falls short of its domestic investment, it must be

If a nation's budget deficit rises, domestic private investment can remain unchanged through some combination of private saving and importing relative to exporting.

Current account includes all of the following except:

Compared to 1960-79, U.S. net national saving form 1980-92 as a proportion of national income

If a country's private saving is 100 and government saving is -100, domestic private investment

If S = 300, T = 800, G = 1100, and I = 150, this makes net foreign investment

From 2004 to 2006, the European Union budget was , private saving was domestic investment, and foreign lending .

In the current debate over fiscal policy, advocates of returning to significant budget surpluses

From 1980 to 1992 net national saving in the United States averaged approximately ________ percent of national income.

From 2004 to 2006, the U.S. budget was , private saving was domestic investment, and foreign borrowing was .

Switching to a faster economic growth path comes at the cost of lower

From 2004 to 2006, the Japanese budget was , private saving was domestic investment, and foreign lending .

In 1980, the U.S. budget was , private saving was domestic investment, and foreign borrowing was .

From 1988 to 1990, the U.S. budget was , private saving was domestic investment, and foreign borrowing was .

The "twin deficits" refer to government expenditures being than net tax revenues at the same time as exports imports.