A temporary increase in government purchases,given the level of output,will lead to
A)a higher desired consumption and a higher desired national saving.
B)a lower desired consumption and a lower desired national saving.
C)a higher desired consumption and a lower desired national saving.
D)a lower desired consumption and a higher desired national saving.

Question

Quizplus · Accepted Answer

A temporary increase in government purchases reduces national saving because it decreases the amount of resources available for private saving, leading to lower desired consumption and lower desired national saving.

A Temporary Increase in Government Purchases,given the Level of Output,will