A country has a government sector deficit and a private sector surplus. If the government sector deficit increases, and the private sector surplus decreases, _.

Question

Quizplus · Accepted Answer

If the government sector deficit increases and the private sector surplus decreases, it means that the government is borrowing more than it is saving, and the private sector is saving less than it is investing. This will likely lead to a decrease in net exports, as the country becomes a net borrower from other countries to finance its deficit spending.

A Country Has a Government Sector Deficit and a Private