If national saving increases, ________. (Assume that the capital account is zero and net transfers are zero.)
A) the sum of domestic investment and net exports must decrease
B) the sum of domestic investment and foreign investment must decrease
C) the sum of domestic investment and foreign investment must increase
D) foreign investment must decrease to cover the gain
Question 2
Increases in government spending result in ________ in the short run, and permanent increases in government spending result in ________ in the long run.
A) complete crowding out; complete crowding out B) partial crowding out; partial crowding out
C) partial crowding out; complete crowding out D) complete crowding out; partial crowding out
