Question

Increases in government spending .............desired national savings #randomize
A. increases
B. Decreases
C. Does not affect
D. Is directly related to

Answer 1

Government spending is type of consumption by government. government spend money on many like to create infrastructure, hospitals, schools, on defence and so on.

Example like today china and usa spend More to create better infrastructure as they affect many company are sattled in china. It help to generate GDP and increase in national income.

So income come from this spendigs mean National income is increase.

But some case government spend money in emergency situation like today medical facilities, defense as they effect national income may decrease.

So national income may income or decrease randomly.

So option D is directly related to national income.