The government's current period budget constraint is
A) G + B = T.
B) G' = T' + (1 + r)B.
C) G = T + B.
D) G + T = B.
E) G + S = B.

Question

Quizplus · Accepted Answer

The government's current period budget constraint is represented by the formula G=T+B, where G is government spending, T is tax revenue, and B is government borrowing. This equation states that the total amount of spending (G) in the current period is equal to the sum of tax revenue (T) and borrowing (B). This is because the government can either use its tax revenue or borrow funds to finance its spending.

The Government's Current Period Budget Constraint Is