Asked by Bimala Sharma Acharya on Jul 21, 2024
Verified
Because a government budget deficit represents
A) negative public saving, it increases national saving.
B) positive public saving, it increases national saving.
C) positive public saving, it decreases national saving.
D) negative public saving, it decreases national saving.
Government Budget Deficit
A financial situation where a government's expenditures exceed its revenues over a specified period, leading to borrowing or debt accumulation.
Public Saving
is the difference between the taxation revenue that the government receives and its spending.
National Saving
The total amount of savings generated within a country, including both private and public savings, which is key to funding investment.
- Comprehend how public saving (or lack thereof) influences national saving and the broader economy.
Verified Answer
HG
Hatziri GarciaJul 23, 2024
Final Answer :
D
Explanation :
A government budget deficit means the government is spending more than it is earning, which is considered negative public saving. This decreases national saving because the total savings in the economy are reduced by the amount of the deficit.
Learning Objectives
- Comprehend how public saving (or lack thereof) influences national saving and the broader economy.