When the Government Goes from Running a Balanced Budget to Running

question 200

Multiple Choice

When the government goes from running a balanced budget to running a budget surplus,

• A)national saving decreases,the interest rate rises,and the economy's long-run growth rate is likely to decrease.
• B)national saving increases,the interest rate falls,and the economy's long-run growth rate is likely to decrease.
• C)national saving decreases,the interest rate rises,and the economy's long-run growth rate is likely to increase.
• D)national saving increases,the interest rate falls,and the economy's long-run growth rate is likely to increase.

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