A government budget surplus from reduced government spending (no change in net taxes)will ________ the level of investment in the economy and ________ the level of saving (private plus public)in the economy.

Question

Quizplus · Accepted Answer

A government budget surplus from reduced spending increases public saving, which can lead to lower interest rates and higher investment. The overall level of saving in the economy (private plus public) also increases.

A Government Budget Surplus from Reduced Government Spending (No Change