Consider the Government's Budget Balance

question 122

Multiple Choice

Consider the government's budget balance.Suppose G = 400 and the government's net tax revenue is 20% of national income (Y) .Government saving is negative for all values of Y

• A)above 10 000.
• B)above 8000.
• C)above 2000.
• D)below 8000.
• E)below 2000.

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Definitions:

Market Interest Rate

The prevailing rate of interest determined by supply and demand in the financial markets.

Straight-Line Method

A method of depreciation that allocates an equal amount of the depreciable cost of an asset to each year of its useful life.

Carrying Value

The net amount at which an asset or liability is reported on the balance sheet, calculated as original cost minus any depreciation, amortization, or impairment costs.

Common Stock

A type of security that represents ownership in a corporation, with holders having a claim on the company's earnings and assets.