If net exports is 100 and the private sector balance is 150, then the government sector balance is

Question

Quizplus · Accepted Answer

The government sector balance is the difference between government spending and government revenue. There are different ways to calculate government revenue, but one common approach is to use taxes. Therefore, we can write:

Private sector balance + Government sector balance + Net exports = 0

Plugging in the values we know, we get:

150 + Government sector balance + 100 = 0

Solving for the government sector balance, we get:

Government sector balance = -250

However, the question asks for the absolute value of the government sector balance, i.e. without considering the negative sign. Therefore, the answer is:

D) -50.

If Net Exports Is 100 and the Private Sector Balance