If the public consumes $200 billion less and the government purchases $200 billion more (other things unchanging), which of the following statements is true? a. There is an increase in saving, and the economy should grow more quickly. b. Saving is unchanged. c. There is not enough information to determine what will happen to the saving. d. There is a decrease in saving, and the economy should grow more slowly.

If the public consumes $200 billion less and the government purchases $200 billion more (other things unchanging), which of the following statements is true? a. There is an increase in saving, and the economy should grow more quickly. b. Saving is unchanged. c. There is not enough information to determine what will happen to the saving. d. There is a decrease in saving, and the economy should grow more slowly.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.

Question

If the public consumes $200 billion less and the
government purchases $200 billion more (other things
unchanging), which of the following statements is true?
a. There is an increase in saving, and the economy
should grow more quickly. b. Saving is unchanged.c.
There is not enough information to determine what will
happen to the saving. d. There is a decrease in saving,
and the economy should grow more slowly.

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