You Have Two Sets of Estimates of National Account Numbers

question 122

Multiple Choice

You have two sets of estimates of national account numbers for a closed economy for next year.In the first set,government expenditures will be $30 billion,transfer payments will be $10 billion,and taxes will be $45 billion.Under the second set,GDP will be $200 billion,taxes will be $50 billion,transfer payments will be $20 billion,consumption will be $120 billion,and investment will be $40 billion.Based on these numbers,what are the respective estimated results?

• A) $15 billion surplus and a $10 billion surplus
• B) $15 billion surplus and a $10 billion deficit
• C) $5 billion surplus and a $10 billion surplus
• D) $5 billion surplus and a $10 billion deficit

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Definitions:

Short Run

A period in which at least one factor of production is fixed, limiting the ability of a business to adjust fully to changes in market conditions.

Average Variable Costs

Costs that vary with the level of output, calculated by dividing the total variable costs by the quantity of output produced.

Shutting-Down

A short-run decision by a firm to halt production because operating would lead to a loss greater than the fixed costs.

Hostages

Individuals held captive by others as security for the fulfillment of specific conditions or demands.