Consider the Following Variables: G = Government Purchases

question 101

Multiple Choice

Consider the following variables: G = government purchases
I = interest rate on government debt
D = stock of government debt
T = net tax revenue
The government's budget constraint can be expressed as

• A)(G + iD)= borrowing - T.
• B)(G + iD)- T = borrowing.
• C)(G + iD)+ T = borrowing.
• D)G - T - (iD)= borrowing.
• E)(G - iD)= borrowing + T.

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