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.

---

Definitions:

Quantity Demanded

The total amount of a good or service consumers are willing to purchase at a specific price level at a given time.

Elastic Demand

Elastic demand indicates that the quantity demanded of a good or service significantly changes in response to a change in price.

Necessity

Essential goods or services required for basic living and welfare of individuals.

Luxury

High-quality goods or services that are not essential but are highly desired and associated with wealth or indulgence.