Suppose that Egypt has a government budget surplus,and then goes into deficit.This action would

Question

Quizplus · Accepted Answer

When Egypt goes from government budget surplus to deficit, it means that the government is spending more than it is taking in. This leads to a decrease in national saving because the government is no longer saving any money. As a result, there will be a decrease in the supply of loanable funds because individuals and companies will have less money available to save and invest. Therefore, the correct answer is C, which states that the decrease in national saving will shift Egypt's supply of loanable funds left.

Suppose That Egypt Has a Government Budget Surplus,and Then Goes