Scenario 18-2

question 243

Multiple Choice

Scenario 18-2.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 18-2.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.

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Definitions:

Disagreement Value

The worth or specific outcome that parties in a negotiation anticipate they could receive if they fail to come to an agreement and decide to pursue other options.

Opportunity Costs

The cost of what is foregone by choosing one alternative over another, representing the benefits that could have been received from the next best alternative.

Bargaining Position

The relative power or leverage that a party has during negotiations to influence the terms in their favor.

Supplier Merges

The act of two or more suppliers combining their operations, often to increase efficiency or market power.