Suppose That a Country's Government Expenditures Are $400 Billion, Net

question 98

Multiple Choice

Suppose that a country's government expenditures are $400 billion, net taxes are $300 billion, saving is $300 billion, and investment is $250 billion. Net exports are a

• A)surplus of $150 billion.
• B)surplus of $50 billion.
• C)deficit of $150 billion.
• D)deficit of $50 billion.
• E)deficit of $250 billion.

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Definitions:

Quantity Demanded

The sum of a product or service that buyers are prepared and able to buy at a specific price.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, often used to gauge the sensitivity of demand.

Constant Slope

A straight line graph that indicates a uniform rate of change between two variables.

Price-inelastic

Price-inelastic describes a situation where the demand for a good or service is relatively unaffected by changes in its price, indicating that consumers continue to purchase it even if the price increases.