Suppose that a country's government expenditures are $400 billion, net taxes are $300 billion, saving is $300 billion, and investment is $250 billion. This country has a government budget
A)surplus and a private sector surplus.
B)surplus and a private sector deficit.
C)deficit and a private sector surplus.
D)deficit and a private sector deficit.
E)surplus and a private sector balance.

Question

Quizplus · Accepted Answer

The government has a budget deficit because expenditures ($400 billion) exceed net taxes ($300 billion). The private sector has a surplus because saving ($300 billion) exceeds investment ($250 billion).

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