In the short run,a surplus federal budget _____.
A)reduces national saving
B)boosts domestic saving
C)stimulates aggregate demand
D)promotes economic growth in the long run
E)increases the federal debt

Question

Quizplus · Accepted Answer

A surplus federal budget means that the government is collecting more revenue than it is spending. This can boost domestic saving as the government can lend the surplus funds to individuals, businesses, or other countries who can use the funds to invest and save. This can ultimately lead to increased economic growth in the long run. However, in the short run, the surplus may not necessarily stimulate aggregate demand, as the government is not injecting additional funds into the economy through spending.

In the Short Run,a Surplus Federal Budget _____