The Accompanying Table Gives Budget Information for a Hypothetical Economy

question 303

Multiple Choice

$$\begin{array} { | c | c | c | c | } \hline & \begin{array} { c } \text { Government } \\\text { Spending }\end{array} & \text { Tax Revenues } & \text { GDP } \\\hline \text { Year 1 } & \$ 450 & \$ 425 & \$ 2,000 \\\hline \text { Year 2 } & 500 & 450 & 3,000 \\\hline \text { Year 3 } & 600 & 500 & 4,000 \\\hline \text { Year 4 } & 640 & 620 & 5,000 \\\hline \text { Year 5 } & 680 & 580 & 4,800 \\\hline \text { Year 6 } & 600 & 620 & 5,000 \\\hline\end{array}$$ The accompanying table gives budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. As a percentage of GDP, the

• A) budget de?cit was 3.9 percent in year 4.
• B) budget surplus was less than 1 percent in year 6.
• C) public debt was 3 percent in year 6.
• D) public debt was 12.5 percent in year 1.

Comprehend the economic functions of profits and losses and their impact on resource allocation.

Recognize the significance of competition and innovation in a market system.

Grasp the Five Fundamental Questions of economics within a market system.

Identify unique characteristics of a market system including private ownership and competition.

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Definitions:

Nonprofit-delivered Services

Services provided by nonprofit organizations, often focusing on social causes, community support, or relief efforts without the aim of generating profits.

Fee-delivered Services

Services for which a specific charge is applied, typically provided professionally or commercially.

Nonprofit Organization

An entity that operates for the promotion of a social cause, cultural, educational, religious or other public interest objectives rather than for profit.

Marketing

The business process of creating relationships with and satisfying customers through a combination of product, price, place, and promotion strategies.