Asked by Cydney Adger on Jul 21, 2024
Verified
The extremely low savings rate in the United States has forced us to borrow almost $_____ billion a day to finance our federal budget deficit and trade deficit.
A) 1
B) 2
C) 3
D) 4
Savings Rate
The percentage of income that is not spent on consumption but instead is saved or invested for future use.
Federal Budget Deficit
Occurs when the government's expenditures exceed its revenues in a fiscal year, leading to the need for borrowing to finance the gap.
Trade Deficit
Another term for Balance-of-Trade Deficit, referring to the scenario where a country's imports of goods and services are greater than its exports.
- Elucidate the correlation between the accumulation of savings, the process of investing, and the progression of economic growth.
Verified Answer
RM
Rajan MishraJul 22, 2024
Final Answer :
B
Explanation :
The correct answer is B) 2 billion a day. This figure highlights the significant amount the United States needs to borrow daily to finance its federal budget deficit and trade deficit, reflecting the country's low savings rate.
Learning Objectives
- Elucidate the correlation between the accumulation of savings, the process of investing, and the progression of economic growth.