Consider the Following Variables: G = Government Purchases

question 95

Multiple Choice

Consider the following variables: G = government purchases
I = interest rate on government debt
D = stock of government debt
T = net tax revenue
The government's budget deficit can be expressed as

• A)ΔD = (G + iD)- T.
• B)ΔD = (G - iD)+ T.
• C)deficit = D - (G + iD)+ T.
• D)deficit = D - T + (G + iD).
• E)T = ΔD - (G + iD).

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