How Will an Increase in the Government Budget Surplus as a Result

Multiple Choice

How will an increase in the government budget surplus as a result of lower government spending (with no change in net taxes) affect private saving in the economy?

A) Private saving will increase by the amount of increase in the budget surplus.
B) Private saving will decrease by the amount of increase in the budget surplus.
C) Private saving will decrease by less than the amount of increase in the budget surplus.
D) Private saving will be unaffected by the increase in the budget surplus.