Knowee
Questions
Features
Study Tools

f 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 ______.

Question

f household saving decreases by 4million,businesssavingincreasesby4 million, business saving increases by 4 million and the government budget deficit decreases by $4 million, then private saving ____ and public saving ______.

🧐 Not the exact question you are looking for?Go ask a question

Solution

Private saving remains the same and public saving increases.

Here's why:

  1. Private saving is the sum of household saving and business saving. If household saving decreases by 4millionandbusinesssavingincreasesby4 million and business saving increases by 4 million, the net effect is zero. Therefore, private saving remains the same.

  2. Public saving is the opposite of the government budget deficit. If the government budget deficit decreases by 4million,thatmeanspublicsavingincreasesby4 million, that means public saving increases by 4 million.

This problem has been solved

Similar Questions

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 ______.Group of answer choicesincreases; increasesdoes not change; decreasesdoes not change; increasesincreases; decreases

Less spending, less borrowing along with low prices of Goods and services usually draw an economy near ___________*1 pointa. Deflationb. Recessionc. Depressiond. Slow down

f the marginal propensity to save is 0.2 and the government decreases its purchases by $20 billion, then real GDP willDecrease by $25 billion.Decrease by $100 billion.Increase by $100 billion.Increase by $25 billion.

If private domestic saving and investment remain constant, an increase in the government budget deficit will Group of answer choicesreduce net exportsreduce national savingincrease net capital inflowsall of the other answers

When would the government most likely decrease its spending?A.When interest rates have decreasedB.When tax revenues have decreasedC.When consumer spending has decreasedD.When unemployment has decreased

1/3

Upgrade your grade with Knowee

Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.