Table 15.1 $\begin{array}{l|r} \text { Federal govermment purchases of } & \ \text { goods and services } & \$ 455 \text { million } \ \hline \text { Transfer payments } & \$ 85 \text { million } \ \hline \text { Tax revenue } & \$ 405 \text { million } \ \hline \text { Interest payment on existing debt } & \$ 60 \text { million } \ \hline \text { Seigniorage } & \$ 10 \text { million } \ \hline \text { Newly-issued government bonds } & \$ 185 \text { million } \end{array}$ The data in the table represents budget figures for the nation of Arugula for 2012. -Refer to Table 15.1.The uses of government funds for Arugula in 2012 total

Question

Quizplus · Accepted Answer

The total uses of government funds can be calculated by adding federal government purchases of goods and services ($455 million), transfer payments ($85 million), interest payment on existing debt ($60 million), and seigniorage ($10 million). 
Total uses of government funds = $455 + $85 + $60 + $10 = $610 million.
However, this total includes the newly-issued government bonds ($185 million), which are not actually uses of funds but rather a way of financing the uses. Therefore, to obtain the actual uses of government funds, we need to subtract the amount of newly-issued government bonds. 
Actual uses of government funds = $610 - $185 = $425 million. 
This amount is not among the answer choices, but the closest option is D ($600 million), which is higher than the actual uses of government funds.

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