Final answer:
When a country has a government budget surplus, (T - G) represents public sector savings and appears on the left side of the saving-investment identity, signifying the supply of financial capital to the economy.
Step-by-step explanation:
If a country is running a government budget surplus, (T - G), which stands for Taxes minus Government spending, is on the left side of the saving-investment identity because it represents public sector savings.
When the government collects more in taxes than it spends, it has surplus funds. These funds can be seen as savings since they are not being spent and thus can be used to provide financial capital to the rest of the economy.
In the national savings and investment identity, the left side signifies the supply of financial capital, which includes both private savings and any surplus from the government's budget.
If T (Taxes) is greater than G (Government spending), the government contributes to the supply of financial capital to the economy. On the other hand, if the government has a budget deficit (where G > T), it would be on the demand side of the equation as it needs to borrow financial capital.