Suppose gross saving in the United States is 20 percent of Gross National Product (GNP). If business saving is 15 percent of GNP and government saving is 4 percent of GNP, what percent of GNP is personal saving? Explain why a federal budget surplus increases national saving while a budget deficit decreases national saving. How can a federal budget deficit increase market equilibrium interest rates and reduce private investment and future economic growth?
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