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ine saving and investment. Data for the simple economy of ot show that in 2013, saving excceded investment and the pemment is running a balanced budget. What is likely to ? what would happen if the government were running icit and saving were equal to iavestment Solution a.When savings is greater than the incvestments, the excess of the money left over with the government after investments can be used to reduce the fiscal deficit of the government. The defecit refers to the excess amount of debt the governmnt has taken when compared to its avaiable cash. So the excess savings can be used to reduce the defecit by paying of debts undertaken. b. Yes. I agree with the comment. It is better to increase spending to improve the overall economy. If there is an increase in spending, the public will get better infrastructure and also will have more money to spend with increase in subsidies. So this excess money in the hands of the public will again fuel the economic growth in the country..

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ine saving and investment. Data for the simple economy of ot show that in 2013, saving excceded investment and the pemment is running a balanced budget. What is likely to ? what would happen if the government were running icit and saving were equal to iavestment Solution a.When savings is greater than the incvestments, the excess of the money left over with the government after investments can be used to reduce the fiscal deficit of the government. The defecit refers to the excess amount of debt the governmnt has taken when compared to its avaiable cash. So the excess savings can be used to reduce the defecit by paying of debts undertaken. b. Yes. I agree with the comment. It is better to increase spending to improve the overall economy. If there is an increase in spending, the public will get better infrastructure and also will have more money to spend with increase in subsidies. So this excess money in the hands of the public will again fuel the economic growth in the country.

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