Suppose the government in a closed economy is running a budget deficit. Based on this information, answer
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Question:
Suppose the government in a closed economy is running a budget deficit. Based on this information, answer the questions below.
(a) Will national or total savings be more, less, or equal to private savings? Explain your answer using a simple numerical example.
(b) Compare the economy above with an economy where the government is running a budget surplus. In which economy do you think investment will be higher? Explain your answer using a simple numerical example
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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