Financial markets are important for bringing equilibrium to the loanable funds market, but do not affect the efficient allocation of scarce resources in the long-run.
The self-fulfilling prophecy refers to the tendency of people to attribute their success with a task to internal factors and their failure to external factors.
Statement I: Our high rate of savings has contributed to the huge trade deficit of the last 20 years. Statement II: Both increasing savings and investment would help reduce the U.S.trade deficit.
A) Statement I is true and statement II is false. B) Statement II is true and statement I is false. C) Both statements are true. D) Both statements are false.