Answer-If the public consumes €100 billion less and the government purchases €100 billion more (o...

Savings will be unchanged if the public consumes euro100 billion less and the government purchases euro100 billion more other things unchanging

Question

If the public consumes €100 billion less and the

government purchases €100 billion more (other things unchanging), which of the following statement is true?

A Saving is unchanged

B There is an increase in saving and the economy should grow more quickly.

C There is a decrease in saving and the economy should grow more slowly.

D There is not enough information to determine what will happen to saving.

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If the public consumes &euro;100 billion less and the

Solution

If the public consumes €100 billion less and the