This blog has been created to provide an area for economics students to read about how economics impacts daily life. It is especially useful for students to understand the application of macroeconomics as communicated through the media and governmental websites.

This online resource has been set up for educational purposes.All rights are reserved by the various websites.

For further clarification, please email colin@mrmc.com.sg

MCQ 22 (C, A)

Which of the following statements is not true about
the relationship between national saving, investment, and net capital outflow?

a.
An increase in saving associated with an equal increase
in net capital outflow leaves domestic investment unchanged.
b.
For a given amount of saving, an increase in net capital outflow must decrease
domestic investment.
c.
For a given amount
of saving, a decrease in net capital outflow must decrease domestic
investment.
d.
Saving is the sum
of investment and net capital outflow.
Suppose a cup of coffee is 1.5 euros in Germany and
£0.50 in the UK. If purchasing power parity holds, what is the nominal exchange rate between
euros and pounds?

a.
3 euros per pound
b.
1.5 euros per pound
c.
0.75 euro per
pound
d.
1/3 euro per
pound
blog it