Question #4

Budget surpluses

• assist the economy to save when activity levels are high.
• undermine private wealth and are mirrored $-for-$ in non-government dis-saving.
• allow the Federal government to build sovereign funds which then help it solve problems in the future.

Answer #17

Answer: undermine private wealth and are mirrored $-for-$ in non-government dis-saving.

Explanation

Please see Deficit spending 101 - Part 1 if you are still wondering why the correct answer is two.

Further, when the government is building a sovereign fund by purchasing financial assets in the open markets it is spending. So it is a myth to say they "used" the surplus up to buy the assets.