There Is an Intimate Relationship Between a Country's BCA and How

There is an intimate relationship between a country's BCA and how the country finances its domestic investment and pays for government expenditures. This relationship is given by BCA ≡ X - M ≡ (S - I) + (T - G) . Given this, which of the following is a true statement?

A) If (S - I) < 0, it implies that a country's domestic savings is insufficient to finance domestic investment.
B) If (T - G) < 0, it implies that a country's tax revenue is insufficient to finance government spending.
C) both a and b are true
D) none of the above

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free