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 ________.
A)increases; increases
B)increases; decreases
C)does not change; increases
D)does not change; decreases

Question

Quizplus · Accepted Answer

Private saving consists of household and business savings. In this case, the decrease in household saving was offset by an equal increase in business saving. Public saving depends on the budget surplus. In this case, the government reduced its deficit by $4 million, so public saving increased.

If Household Saving Decreases by $4 Million, Business Saving Increases