If a country went from a government budget deficit to a surplus,which of the following best predicts the consequences?

Question

Quizplus · Accepted Answer

When a country goes from a budget deficit to a surplus, it means that the amount of government spending is less than the amount of government revenue. This results in an increase in national saving as the government is saving money instead of spending it. An increase in national saving shifts the supply of loanable funds right, as there are more savings available for investment. This leads to a decrease in the interest rates, which stimulates private investment and economic growth.

If a Country Went from a Government Budget Deficit to a Surplus,which