If National Saving S) Is $100,000, Net Taxes T) Equal

question 197

Multiple Choice

If national saving S) is $100,000, net taxes T) equal $100,000 and government expenditure G. is $25,000, how much are households and businesses saving?

• A) $25,000.
• B) -$25,000.
• C) $225,000.
• D) none of the above

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Definitions:

Income

The amount of money received on a regular basis through work or investments.

Multiplier Effect

The relative change in net income resulting from an addition or reduction in expenditure.

Crowding out

A situation in economics where increased government spending displaces private sector spending, either through higher taxes, higher interest rates, or borrowing.

Government Expenditures

The spending by the government sector on goods and services, including public services and public investment.