You Have Some Estimates of National Accounts Numbers for a Closed

question 57

Multiple Choice

You have some estimates of national accounts numbers for a closed economy for the coming year.Under one set of expectations,government purchases will be $30 billion,transfer payments will be $10 billion,and taxes will be $45 billion.Under another set of expectations,GDP will be $200 billion,taxes will be $50 billion,transfer payments will be $20 billion,consumption will be $120 million,and investment will be $40 billion.Based on these numbers in the first case there should be a

• A)$15 billion surplus,and in the second case a $10 billion surplus.
• B)$15 billion surplus,and in the second case a $30 billion deficit.
• C)$5 billion surplus,and in the second case a $10 billion deficit.
• D)$5 billion surplus,and in the second case a $30 billion deficit.

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Definitions:

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource, considering all other factors constant.

Purely Competitive

A market structure characterized by many buyers and sellers, none of whom can influence market prices, with free entry and exit from the market.

Product Price

The amount of money required to purchase a good or service, determined by factors such as cost of production, market demand, and competition.

Imperfectly Competitive

Characterizes markets where individual sellers can influence prices and products, unlike in perfectly competitive markets.