Which of the following would increase public saving?
A)an increase in taxes
B)an increase in transfers
C)an increase in government purchases
D)All of the above would increase public saving.

Question

Quizplus · Accepted Answer

When taxes are increased, people have less disposable income, which leads to an increase in public saving as people will not have as much money available to spend. This is because they are forced to save a portion of their income due to the increase in taxes.

Answer: B 
 An increase in transfers, such as welfare or unemployment benefits can also lead to an increase in public saving. This is because people who receive these transfers are likely to save some of that income, particularly if the transfer is meant to be a temporary supplement to their income.

Answer: C 
 An increase in government purchases is likely to decrease public saving as the government will need to fund those purchases, which will increase the budget deficit, leading to a decrease in public saving.

Therefore, the correct answer is: A and B

Which of the Following Would Increase Public Saving