Figure 2-1

-Assuming a closed economy (i.e. ,NX =O)the data in Figure 2-1 suggest that for each year after 1980

Question

Figure 2-1
 
-Assuming a closed economy (i.e. ,NX =O)the data in Figure 2-1 suggest that for each year after 1980

Quizplus · Accepted Answer

The figure shows that national saving (both public and private) has been positive for each year after 1980. Since NX is assumed to be zero in the question, this means that private saving (which is part of national saving) also has to be positive. Option A and B can be eliminated as they suggest that private saving could be negative, which is not possible according to the given data. Option D can also be eliminated as private saving is shown to be a positive component of national saving.

Figure 2-1 -Assuming a Closed Economy (I.e. ,NX =O)the Data in Figure