Use the following to answer questions:
-(Table: Investment Spending, Private Spending, and Capital Inflows) Use Table: Investment Spending, Private Spending, and Capital Inflows. What is the budget balance as a percentage of GDP in Southlandia?

Question

Use the following to answer questions: 
-(Table: Investment Spending, Private Spending, and Capital Inflows) Use Table: Investment Spending, Private Spending, and Capital Inflows. What is the budget balance as a percentage of GDP in Southlandia?

Quizplus · Accepted Answer

The budget balance is calculated as the difference between government spending and revenues. In this table, government spending is equal to investment spending and private spending, which is $400 billion + $800 billion = $1.2 trillion. Government revenue is equal to capital inflows, which is $1.2 trillion. Therefore, the budget balance is $1.2 trillion - $1.2 trillion = $0.

As a percentage of GDP, the budget balance is calculated as ($0 / $12 trillion) x 100% = 0%. Therefore, the answer is B, 0%.

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