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
A)surplus of $150 billion.
B)surplus of $50 billion.
C)deficit of $150 billion.
D)deficit of $50 billion.
E)deficit of $250 billion.

Question

Quizplus · Accepted Answer

Net exports can be calculated using the formula: Net Exports = (Saving - Investment) + (Net Taxes - Government Expenditures). Substituting the given values: Net Exports = ($300 billion - $250 billion) + ($300 billion - $400 billion) = $50 billion - $100 billion = -$50 billion, indicating a deficit of $50 billion.

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