Question

An increase in the government’s budget surplus means a. public saving is greater than $0 and increasing. b. public saving is greater than $0 and decreasing. c. public saving is less than $0 and increasing. d. public saving is less than $0 and decreasing.

Answer 1

Answer:

A) public saving is greater than $0 and increasing.

Explanation:

If the government has a budget surplus it means that its tax revenue is larger than its spending.

Some people use the term public saving to refer to a budget surplus, but the word saving is generally used by private individuals or corporations, not government entities. Governments don't save money, they don't need to do it since they can print it and make more money.

Anyway, if the budget surplus exists and it is increasing, it means that the government is currently having larger tax revenue than spending and that difference is increasing.