Suppose During One Fiscal Year, Government Purchases Are $195 Billion

question 60

Multiple Choice

Suppose during one fiscal year, government purchases are $195 billion, debt- service payments are $22 billion and net tax revenues are $208 billion. What is the government's primary budget deficit/surplus?

• A)primary budget surplus of $9 billion
• B)primary budget deficit of $9 billion
• C)primary budget surplus of $13 billion
• D)primary budget surplus of $22 billion
• E)primary budget deficit of $13 billion

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Definitions:

Statute of Frauds

A legal principle that requires certain types of contracts (e.g., real estate transactions, contracts not to be performed within a year) to be in writing and signed by the parties to be enforceable.

Credit

A contractual agreement in which a borrower receives something of value now and agrees to repay the lender at a later date, generally with interest.

Receipt

A written acknowledgment that something of value has been transferred from one party to another.

Statute of Frauds

A rule of law that mandates specific contract types to be documented in writing and signed by the accountable party for them to be valid and enforceable.