When the government's budget deficit increases the government is borrowing
A)less and public savings falls.
B)less and public savings increases.
C)more and public savings falls.
D)more and public savings increases.

Question

Quizplus · Accepted Answer

When the government's budget deficit increases, it means the government is spending more than it is earning, leading to increased borrowing. This borrowing can crowd out private investment, leading to a decrease in public savings.

When the Government's Budget Deficit Increases the Government Is Borrowing