An increase in government expenditures ________ "national saving" and thus tends to ________ private investment.

Question

Quizplus · Accepted Answer

An increase in government expenditures decreases national saving as the government is decreasing the amount of money that could have been saved by the private sector. This decrease in national saving tends to decrease private investment as there is now less money available for individuals and businesses to invest in capital goods and other productive assets.

An Increase in Government Expenditures ________ "National Saving" and Thus