Scenario 26-2

question 74

Multiple Choice

Scenario 26-2.Assume the following information for an imaginary,closed economy.
GDP = $5 trillion;consumption = $3.1 trillion;
government purchases = $0.7 trillion;and taxes = $0.9 trillion.
-Refer to Scenario 26-2.For this economy,public saving is equal to

• A)$0.2 trillion and the government is running a budget surplus of $0.2 trillion.
• B)$0.2 trillion and the government is running a budget deficit of $0.2 trillion.
• C)-$0.2 trillion and the government is running a budget deficit of $0.2 trillion.
• D)-$0.2 trillion and the government is running a budget surplus of $0.2 trillion.

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Definitions:

Consolidated Income Tax

Income tax accounting that includes all income, exemptions, and credits of a consolidated group of companies.

Inventory

The raw materials, work-in-progress products, and finished goods that a company holds for the purpose of sale in the near future.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary based on income level, type of income, or legal jurisdiction.

Noncontrolling Interest

A minority ownership in a subsidiary, where the parent company owns the majority but not all of the subsidiary's shares.