Assuming the economy was in equilibrium,use the following information to determine the government's budget deficit.
$$\begin{array} { | l | r | }
\hline \text { Cansumption Spending } & \mathbf { \$ 3 . 5 } \text { tillian } \
\hline \text { Net Taxes } & \mathbf { 2 } .7 \text { tillian } \
\hline \text { Hausehold Seving } & \mathbf { 2 . 5 \text { tillian } } \
\hline \text { Investment Spenfing } & \mathbf { 2 . 2 \text { tillian } } \
\hline \text { Guvernment Purchases } & \mathbf { \$ 3 . 0 \text { tillian } } \
\hline
\end{array}$$
The government's deficit (surplus)was
A) -$0.3 trillion deficit ($0.3 trillion surplus)
B) -$0.2 trillion deficit
C) $0.2 trillion deficit
D) $0.3 trillion deficit
E) $0.5 trillion deficit

Question

Assuming the economy was in equilibrium,use the following information to determine the government's budget deficit.
$$\begin{array} { | l | r | } 
\hline \text { Cansumption Spending } & \mathbf { \$ 3 . 5 } \text { tillian } \
\hline \text { Net Taxes } & \mathbf { 2 } .7 \text { tillian } \
\hline \text { Hausehold Seving } & \mathbf { 2 . 5 \text { tillian } } \
\hline \text { Investment Spenfing } & \mathbf { 2 . 2 \text { tillian } } \
\hline \text { Guvernment Purchases } & \mathbf { \$ 3 . 0 \text { tillian } } \
\hline
\end{array}$$
The government's deficit (surplus)was
A) -$0.3 trillion deficit ($0.3 trillion surplus)
B) -$0.2 trillion deficit
C) $0.2 trillion deficit
D) $0.3 trillion deficit
E) $0.5 trillion deficit

Quizplus · Accepted Answer

To find the government's deficit, we need to use the equation: 
Deficit = Government Purchases - Net Taxes 
Deficit = $3.0 trillion - $2.7 trillion = $0.3 trillion deficit. Thus, the answer is D, a $0.3 trillion deficit.

Assuming the Economy Was in Equilibrium,use the Following Information to Determine