Final answer:
Increasing consumption and government spending by 5% is likely to decrease the nation's saving rate, as more income is diverted away from savings towards expenditure. The exact impact would depend on various economic factors but would lead to a reduction in the overall saving rate.
Step-by-step explanation:
The question regards the impact on the nation's saving rate if consumption and government spending both increase by 5%. In economic terms, the national saving rate is a measure of the total savings of a nation, which includes savings by individuals, businesses, and the government as a proportion of GDP (Gross Domestic Product).
By increasing consumption and government spending, there will generally be a decrease in the nation's saving rate, as more income is being directed towards spending rather than saving. The specific percentage impact on the saving rate would require more detailed economic data. However, if the income levels remain constant and both consumption and government spending increase, this implies that the savings component of GDP is diminishing, therefore reducing the saving rate.
In the context of U.S. national savings and comparing it to other countries, it's notable that the U.S. saves around 17% of its GDP, whereas the world average is around 22%. This suggests that any further decrease in the saving rate, due to higher consumption and government spending, would further widen this gap.