Consider Three Different Closed Economies with the Following National Income

question 33

Multiple Choice

Consider three different closed economies with the following national income statistics. Country A has taxes of $40 billion, transfers of $20 billion, and government expenditures on goods and services of $30 billion. County B has private savings of $60 billion, and investment expenditures of $50 billion. Country C has GDP of $300 billion, investment of $70, consumption of $180 billion, taxes of $60 billion and transfers of $20 billion. From this information we know that there is a $10 billion government budget deficit for

• A)only country A.
• B)only country B.
• C)only country C.
• D)all three countries.

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Definitions:

Interest Rate

The cost of borrowing money or the return on investment, expressed as a percentage of the principal.

Quantity Supplied of Loans

The total amount of loans lenders are willing to provide at a given interest rate during a specific time period.

Surplus

An excess of a product or resource that occurs when supply exceeds demand, often leading to lower prices.

Competition

The effort and striving between two or more independent rivals to secure the business of one or more third parties by offering the best possible terms.