The Table Contains Budget Information for a Hypothetical Economy

question 338

Multiple Choice

$$\begin{array} { | c | c | c | c | } \hline & \begin{array} { c } \text { eGovernment } \\\text { Spending }\end{array} & \text { Tax Revenues } & \text { GDP } \\\hline \text { Year 1 } & \$ 800 & \$ 825 & \$ 4,000 \\\hline \text { Year 2 } & 850 & 850 & 4,200 \\\hline \text { Year 3 } & 900 & 875 & 4,350 \\\hline \text { Year 4 } & 950 & 900 & 4,500 \\\hline \text { Year 5 } & 1,000 & 925 & 4,600 \\\hline\end{array}$$ The table contains budget information for a hypothetical economy. All data are in billions of dollars. Assume that Year 1 is the ?rst year for this economy and Year 5 is the current year. What is the public
Debt in this economy at Year 5?

• A) $25 billion
• B) $75 billion
• C) $125 billion
• D) $925 billion

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Definitions:

Common Stock

Signifies holding stakes in a corporation, which provides owners with the right to vote and a portion of the company's earnings via dividends.

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company’s earnings.

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate if a stock is over or under-valued.

Market Price

The current price at which an asset or service can be bought or sold, determined by demand and supply forces in the market.