Consider the long-run theory of investment,saving,and growth.For a given level of national income,an increase in private consumption or government purchases will cause national saving to

Question

Quizplus · Accepted Answer

According to the long-run theory of investment, saving, and growth, an increase in private consumption or government purchases will lead to a decrease in national saving. This is because a higher level of consumption or government purchases means less money available to save, which in turn leads to less money available for investment. Therefore, the correct choice is E, that is, a decrease in national saving.

Consider the Long-Run Theory of Investment,saving,and Growth