Question
The decline in tax revenues and increased public expenditure due to the spread of COVID-19 are increasing the budget deficit in Turkey this year compared
The decline in tax revenues and increased public expenditure due to the spread of COVID-19 are increasing the budget deficit in Turkey this year compared to last year. At the same time, Turkey has been running a large trade deficit and has to keep that deficit equal to its level last year. In this situation if the government wants to keep invest at the same level as last year, what should happen to the private savings in Turkey?
( Can i please know which of below should be the correct answer and why ?)
a.The private savings in Turkey must increase by the same amount that the budget deficit increases.
b.The private savings in Turkey must increase by more than the amount that the budget deficit increases.
c.The private savings in Turkey must increase by less than the amount that the budget deficit increases.
d.The private savings in Turkey must decrease by the same amount that the budget deficit increases.
e.The private savings in Turkey must decrease by more than the amount that the budget deficit increases.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started