Problems and Applications Q9 Investment can be increased both by reducing taxes on private saving and by reducing the government budget deficit. Average: /2 True or False: It is possible to implement both of these policies at the same time because reducing taxes on private spending has the effect of decreasing the government budget deficit. a. True b. FalseWhat would you need to know in order to judge which of these two policies would be a more effective way to raise investment? Check all that apply. a. The elasticity of private saving with respect to the after-tax real interest rate b. The responsiveness of private saving to increases in investment c. The response of private saving to changes in the government budget deficit