If China's government increases its budget surplus, there is ________ in the supply of loanable funds, private saving ________ and investment ________.

Question

Quizplus · Accepted Answer

When the government increases its budget surplus, it means that the government is saving more than it is spending. This leads to an increase in the supply of loanable funds, as the government is now lending out more money. As a result, private saving decreases, as people are now saving less since the government is saving more. Finally, investment increases, as there is now more money available to borrow for investment purposes.

If China's Government Increases Its Budget Surplus, There Is ________