If current savings increases the same amount as the federal stimulus,
A) the budget deficit will not increase.
B) the effects of the stimulus are negated.
C) the government will continue to conduct fiscal policy.
D) consumption must also increase.
E) the effects of the stimulus are multiplied.

Question

Quizplus · Accepted Answer

If current savings increase by the same amount as the federal stimulus, the additional funds provided by the stimulus are saved rather than spent, negating the intended effect of boosting consumption and economic activity.

If Current Savings Increases the Same Amount as the Federal