Figure 16-1

-In Figure 16-1, there are four levels of income.G is government expenditures and TT is taxes less transfers.At which level of income does the official budget produce a surplus?
A)Y₄
B)Y₃
C)Y₂
D)Y₁

Question

Figure 16-1
 
-In Figure 16-1, there are four levels of income.G is government expenditures and TT is taxes less transfers.At which level of income does the official budget produce a surplus?
A)Y₄ 
B)Y₃ 
C)Y₂ 
D)Y₁

Quizplus · Accepted Answer

A budget surplus occurs when government expenditures (G) are less than taxes less transfers (TT). At income level Y₄, the official budget produces a surplus because TT exceeds G.

Figure 16-1 -In Figure 16-1, There Are Four Levels of Income.G Is