When the government increases the government budget deficit, national saving decreases.

Question

Quizplus · Accepted Answer

When the government increases the budget deficit, it means that it is spending more than it is collecting in revenue. This results in a decrease in national saving because the government is borrowing from the public or from foreign entities to finance its spending, which reduces the amount of savings available for private investment.

When the Government Increases the Government Budget Deficit, National Saving