You Have Two Sets of Estimates of National Account Numbers

question 122

Multiple Choice

You have two sets of estimates of national account numbers for a closed economy for next year.In the first set,government expenditures will be $30 billion,transfer payments will be $10 billion,and taxes will be $45 billion.Under the second set,GDP will be $200 billion,taxes will be $50 billion,transfer payments will be $20 billion,consumption will be $120 billion,and investment will be $40 billion.Based on these numbers,what are the respective estimated results?

• A) $15 billion surplus and a $10 billion surplus
• B) $15 billion surplus and a $10 billion deficit
• C) $5 billion surplus and a $10 billion surplus
• D) $5 billion surplus and a $10 billion deficit

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Definitions:

Goodwill

An immaterial asset generated when a company is purchased at a price exceeding the fair market value of its clear net assets.

Equity Method

A method of accounting in which an investor recognizes its share of the profits and losses of an investee company in its own profit and loss statement, proportional to the investor's share of equity in the investee.

Diluted Earnings Per Share

A metric that calculates a company’s earnings per share considering all potentially convertible securities.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock and usually receives dividends before common shareholders.