Answer the Question Using the Following Budget Information for a Hypothetical

question 119

Multiple Choice

Answer the question using the following budget information for a hypothetical economy.Assume that all budget surpluses are used to pay down the public debt. $\begin{array}{c}\begin{array}{lll}\\\\\text {Year 1}\\\text {Year 2}\\\text {Year 3}\\\text {Year 4}\\\text {Year 5}\\\text {Year 6}\end{array}\begin{array}{c}\text {Government}\\\underline{\text {Spending}}\\ \$ 450 \\500\\600\\640\\680\\600\end{array}\begin{array}{c}\\\underline{\text {Tax Revenues}}\\\$ 425 \\450 \\500 \\620 \\580 \\620\end{array}\begin{array}{c}\\\underline{\text { GDP }} \\ \$ 2,000 \\3,000 \\4,000 \\5,000 \\4,800 \\5,000\end{array}\end{array}$
Refer to the data.The budget deficit in year 3 is:

• A) $175 billion.
• B) $3,050 billion.
• C) $100 billion.
• D) $295 billion.

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Definitions:

Globalization Of Production

The process of firms expanding their operations by developing the international organization of their product supply chains.

National Differences

Variations in cultural, economic, legal, and political systems across countries that can affect how businesses operate internationally.

Cost And Quality

Describes the relationship between the cost of producing a good or service and its quality, often indicating that higher quality can lead to higher production costs.

Global Convergence

The process by which ideas, goods, and services spread and integrate across different cultures and countries, leading to increased similarity.