In 2011, the federal government of Happy Isle had tax revenues of $1 million, and spent $500,000 on transfer payments, $250,000 on goods and services and $300,000 on debt interest. In 2011, the government of Happy Isle had a __________.

Question

Quizplus · Accepted Answer

A budget deficit occurs when expenses exceed revenues. In this case, total expenses amount to $1,050,000 ($500,000+$250,000+$300,000), which exceeds total tax revenues of $1,000,000. Therefore, the government of Happy Isle had a budget deficit of $50,000 in 2011.

In 2011, the Federal Government of Happy Isle Had Tax