Consider the long-run theory of investment,saving,and growth.For a given level of private saving,a decrease in the government's budget deficit ________ the long-run rate of economic growth.

Question

Quizplus · Accepted Answer

A decrease in the government's budget deficit often means less government borrowing. This can lead to more available savings for investment in the private sector, potentially increasing the long-run rate of economic growth by fostering more capital formation.

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