Scenario 8-3

question 123

Multiple Choice

Scenario 8-3. Assume the following information for an imaginary, open economy.
Consumption = $1,000; investment = $300; net exports = $100;
taxes = $230; private saving = $200; and national saving = $150.
-Refer to Scenario 8-3. This economy's government is running a

• A) budget deficit of $50.
• B) budget deficit of $80.
• C) budget surplus of $50.
• D) budget surplus of $80.

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Definitions:

Advanced Economy

A term used to describe countries with a high level of income per capita and industrial development, along with a high Human Development Index (HDI).

Economic Growth

An increase in the capacity of an economy to produce goods and services, compared from one period of time to another.

United Kingdom

A nation with sovereignty positioned to the northwest of mainland Europe, consisting of England, Scotland, Wales, and Northern Ireland.

Real GDP

Gross Domestic Product adjusted for inflation, providing a measure of the value of goods and services produced in a country using constant prices.