Suppose that a country's government expenditures are $400 billion, net taxes are $300 billion, saving is $300 billion, and investment is $250 billion.Net exports are a

Question

Quizplus · Accepted Answer

To find the net exports, we need to use the equation:
Net Exports = Saving - Investment + Net Taxes - Government Expenditures

Plugging in the given values, we get:
Net Exports = $300 billion - $250 billion + $300 billion - $400 billion
Net Exports = $-50 billion

Since the value is negative, this indicates a trade deficit of $50 billion. Therefore, the answer is option C: deficit of $50 billion.

Suppose That a Country's Government Expenditures Are $400 Billion, Net