An increase in net taxes (that is, taxes paid by the private sector to the government, less transfer payments and interest payments made by the government to the private sector) will:
A)increase private saving
B)decrease public saving
C)increase public saving
D)reduce investment in new capital equipment

Question

Quizplus · Accepted Answer

An increase in net taxes increases public saving because it means the government is collecting more in taxes than it is spending on transfers and interest payments, effectively reducing its deficit or increasing its surplus.

An Increase in Net Taxes (That Is, Taxes Paid by the Private