Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized for You
we will pick new questions that match your level based on your Timer History
Track Your Progress
every week, we’ll send you an estimated GMAT score based on your performance
Practice Pays
we will pick new questions that match your level based on your Timer History
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
It appears that you are browsing the GMAT Club forum unregistered!
Signing up is free, quick, and confidential.
Join other 500,000 members and get the full benefits of GMAT Club
Registration gives you:
Tests
Take 11 tests and quizzes from GMAT Club and leading GMAT prep companies such as Manhattan GMAT,
Knewton, and others. All are free for GMAT Club members.
Applicant Stats
View detailed applicant stats such as GPA, GMAT score, work experience, location, application
status, and more
Books/Downloads
Download thousands of study notes,
question collections, GMAT Club’s
Grammar and Math books.
All are free!
Thank you for using the timer!
We noticed you are actually not timing your practice. Click the START button first next time you use the timer.
There are many benefits to timing your practice, including:
Many economists believe that a high rate of business savings [#permalink]
Show Tags
04 Feb 2005, 16:15
1
This post was BOOKMARKED
Question 1
00:00
A
B
C
D
E
Question Stats:
77% (02:29) correct
23% (00:31) wrong
based on 56
HideShow timer Statistics
Question 2
00:00
A
B
C
D
E
Question Stats:
86% (01:25) correct
14% (00:50) wrong
based on 51
HideShow timer Statistics
Question 3
00:00
A
B
C
D
E
Question Stats:
69% (01:43) correct
31% (00:27) wrong
based on 51
HideShow timer Statistics
Many economists believe that a high rate of business savings in the United States is a necessary precursor to investment, because business savings, as opposed to personal savings, comprise almost three-quarters of the national savings rate, and the national savings rate heavily influences the overall rate of business investment.
These economists further postulate that real interest rates-the difference between the rates charged by lenders and the inflation rates-will be low when national savings exceed business investment (creating a savings surplus),and high when national savings fall below the level of business investment (creating a savings deficit ).
However, during the 1960's real interest rates were often higher when the national savings surplus was large. Counterintuitive behavior also occurred when real interest rates skyrocketed from 2 percent in 1980 to 7 percent in 1982, even though national savings and investments were roughly equal throughout the period. Clearly, real interest rates respond to influences other than the savings/investment nexus. Indeed, real interest rates may themselves influence swings in the savings and investment rates. As real interest rates shot up after 1979, foreign investors poured capital into the United States, the price of domestic goods increased prohibitively abroad, and the price of foreign-made goods became lower in the United States. As a result, domestic economic activity and the ability of businesses to save and invest were restrained.
The passage is primarily concerned with A. contrasting trends in two historical periods B. presenting evidence that calls into question certain beliefs C. explaining the reasons for a common phenomenon D. criticizing evidence offered in support of a well-respected belief E. comparing conflicting interpretations of a theory
According to the passage, which of the following resulted from foreign investment in the United States after 1979? A. An increase in real interest rates B. A decrease in the savings rate of certain other nations C. An increase in American investment abroad D. An increase in the price of American goods abroad E. A decrease in the price of domestic goods sold at home
The author of the passage would be most likely to agree with which of the following statements regarding the economists mentioned in line 1? A. Their beliefs are contradicted by certain economic phenomena that occurred in the United States during the 1960's and the 1980's. B. Their theory fails to predict under what circumstances the prices of foreign and domestic goods are likely to increase. C. They incorrectly identify the factors other than savings and investment rates that affect real interest rates. D. Their belief is valid only for the United States economy and not necessarily for other national economies. E. They overestimate the impact of the real interest rate on the national savings and investment rates.
Re: Many economists believe that a high rate of business savings [#permalink]
Show Tags
05 Feb 2005, 21:27
Well, I've been sleeping for five hours on average last week, as only late night was when I really have time to sit down and do some studying. But I'm taking the next week off from work, so I would be able to sleep some more now. Thanks guys.
Re: Many economists believe that a high rate of business savings [#permalink]
Show Tags
29 Jan 2015, 01:47
1
This post received KUDOS
arunrnair wrote:
Got the answer as BDE : Time 5.3 min.
Why is option E wrong. Can any one clarify pls
Let me try to answer. Firstly,option A correct as the information is clearly and expilcitly given in the passage. For option E,the economists theory is given in the passage as inaccurate as well as inconsistent because there are two scenarios given in which claim made by economists dont work.So,word 'overestimate' is incorrectly used.
Hope it helps. _________________
ITS NOT OVER , UNTIL I WIN ! I CAN, AND I WILL .PERIOD.
Re: Many economists believe that a high rate of business savings [#permalink]
Show Tags
24 Feb 2017, 04:55
Hello from the GMAT Club VerbalBot!
Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).
Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
gmatclubot
Re: Many economists believe that a high rate of business savings
[#permalink]
24 Feb 2017, 04:55
There’s something in Pacific North West that you cannot find anywhere else. The atmosphere and scenic nature are next to none, with mountains on one side and ocean on...
This month I got selected by Stanford GSB to be included in “Best & Brightest, Class of 2017” by Poets & Quants. Besides feeling honored for being part of...
Joe Navarro is an ex FBI agent who was a founding member of the FBI’s Behavioural Analysis Program. He was a body language expert who he used his ability to successfully...
close
Well, I've been sleeping for five hours on average last week, as only late night was when I really have time to sit down and do some studying. But I'm taking the next week off from work, so I would be able to sleep some more now. 
Thanks guys. 
2
