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.

---

Definitions:

Union Members

Individuals who are part of a labor union, an organization that represents workers' interests in negotiations with employers.

Private Sector Employees

Individuals who work for businesses or organizations that are not owned or operated by the government.

Government Employees

Individuals employed by federal, state, or local government agencies, often subject to distinct rules and protections compared to private sector employees.

Civil Service Reform Act

Legislation aimed at improving the efficiency, accountability, and quality of public service by reforming hiring practices and employment conditions.