PPSCFPSCNTSPakistan govt jobs
- Subject
- Stockseconomics-mcqs › stocks
- Published
- 30 May 2019
- Last updated
- 28 May 2026
If the public reduces consumption by Rs 100 billion while the government increases its spending by Rs 100 billion, assuming all other factors remain constant, which statement is correct?
Multiple choice question for Stocks. Select an option, then review the explanation below.
Explanation
When public consumption decreases by Rs 100 billion and government spending rises by the same amount, total saving does not change because the reduction in private consumption offsets the increase in government expenditure.
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Practice related questions from the same subject.
- 1.What is the effect of an increase in the budget surplus on the market for loanable funds?
- 2.What happens to real interest rates and investment if Pakistani citizens become less future-oriented and reduce their savings at every real interest rate?
- 3.What effect does a rise in the budget deficit have on public savings?
- 4.What is the effect of a larger budget deficit on the real interest rate and the demand for loanable funds used for investment?
- 5.Which combination of government policies is most effective in promoting economic growth?