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When firms invest less because people are saving less, it is called the:
a. international trade effect.
b. wealth effect.
c. interest rate effect.
d. investment effect.
e. savings effect.
Today, not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP). The regions that have higher levels of real per capita GDP probably also have:
a. growth-promoting institutions like property rights.
b. lower levels of government spending.
c. very little new business formation and job growth.
d. higher income tax rates.
e. higher rates of poverty.
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