The Accompanying Table Gives Budget Information for a Hypothetical Economy

question 262

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. If year 1 is the ?rst year of this nation's existence and
Year 4 is the present year, the public debt as a percentage of GDP in year 4 is

• A) 7.5 percent.
• B) 1.39 percent.
• C) 2.5 percent.
• D) 3.9 percent.

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Definitions:

Erikson

is associated with Erik Erikson, a psychologist known for his theory on psychosocial development across eight stages of human life.

Toddlerhood

A developmental stage in human children from approximately 1 to 3 years old, characterized by rapid growth in mobility, language skills, and independence.

Crisis

A time of intense difficulty, trouble, or danger, requiring a decision that can be critical for its resolution.

Freud

An Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.