Question

⒈ When the government runs a budget surplus, it uses the funds to
A) decrease public saving. B) issue bonds.
C) decrease transfer payments. D) pay down outstanding debt.
⒉From a macroeconomic perspective, the problem of low household saving has probably been
overstated because:
A) it is national saving, not household saving, that allows an economy to accumulate new
capital.
B) household saving is not related at all to an economy's ability to accumulate new capital.
C) household saving has been increasing steadily over the last three decades.
D) household saving represents a smaller share of national saving than does public saving.

Answer 1

1)

Answer: (d)

If government has suplus budget, it uses it for paying off the outstanding debt.

Debt is the accumulated fiscal deficit of government. When government has surplus , it seeks to reduce the debt level.