Scenario 13-2

question 267

Multiple Choice

Scenario 13-2. Assume the following information for an imaginary, closed economy.
GDP = $200,000; consumption = $120,000;
government purchases = $35,000; and taxes = $25,000.
-Refer to Scenario 13-2. For this economy, public saving is equal to

• A)$-10,000 and the government is running a budget deficit of $10,000.
• B)$-10,000 and the government is running a budget surplus of $10,000.
• C)$10,000 and the government is running a budget deficit of $10,000.
• D)$10,000 and the government is running a budget surplus of $10,000.

---

Definitions:

Financing

The process or means of providing funds for business activities, making purchases, or investing.

Purchase Assets

The act of acquiring property, equipment, or other valuable items that are expected to generate revenue or appreciate in value over time.

Mutual Fund

An investment program funded by shareholders that trades in diversified holdings and is professionally managed.

C Corporations

A legal structure for a corporation in which the owners, or shareholders, are taxed separately from the entity.