Suppose That the Economy Is in Equilibrium, with a Trade

question 109

Multiple Choice

Suppose that the economy is in equilibrium, with a trade deficit and with saving greater than investment.According to the circular-flow model, what is the state of the government's budget?  

• A) It is in deficit. 
• B) It is in surplus. 
• C) It is balanced. 
• D) It is zero.

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Definitions:

Measure Of Activity

A metric used to gauge the level of a specific operation or process over a given time period.

Activity Rate

A rate used to allocate indirect costs to products or services, based on a specific activity or driver.

Product Design

The process of creating, defining, and managing the specifications of a physical product or its system to solve a particular problem.

Purchase Order Processing

The procedure of managing the ordering of goods and services from suppliers, including creating, approving, and managing purchase orders.