If Household Saving Increases by $3 Million, Business Saving Decreases

question 126

Multiple Choice

If household saving increases by $3 million, business saving decreases by $1 million, and the government budget deficit decreases by $2 million, then private saving ______ and public saving ______.

• A) increases; increases
• B) increases; decreases
• C) does not change; increases
• D) does not change; decreases

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Definitions:

Money-Market Funds

Investment funds that invest in short-term debt securities with the goal of providing high liquidity and low risk.

Treasury Bills

Short-term government securities with maturities of one year or less, used as a tool for managing short-term liquidity.

Strategic Investments

Investments made by a company in alignment with its long-term goals and objectives, often to secure a competitive advantage or enter new markets.

Debt Or Equity Securities

Financial instruments indicating ownership in a company (equity) or a loan made to the company or government entity (debt), which may produce income through interest or dividends.