If household saving decreases by $4 million, business saving increases by $4 million, and the government...
If household saving decreases by $4 million, business saving increases by $4 million, and the government budget deficit decreases by $4 million, then private saving ______ and public saving ______. Select one: a. increases; increases b. increases; decreases c. does not change; increases d. does not change; decreases..... expl why
Homework Answers
Answer
c. does not change; increases
Budget deficit =G-T
and opposite
T-G =public saving
so
the deficit decreased means the public saving increased
=======
Private saving =sum of saving of households + sum of saving of businesses=-4+4=0
private saving does not change.
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