You have some estimates of national accounts numbers for a closed economy for the coming year.Under one set of expectations,government expenditures will be $30 billion,transfer payments will be $10 billion,and taxes will be $45 billion.Under another set of expectations,GDP will be $200 billion,taxes will be $50 billion,transfer payments will be $20 billion,consumption will be $120 million,and investment will be $40 billion.Based on these numbers in the first case there should be a

Question

Quizplus · Accepted Answer

In the first case, to find the surplus, we need to subtract the sum of government expenditures and transfer payments from the taxes. 
Thus, surplus = taxes - (government expenditures + transfer payments) 
Surplus = $45 billion - ($30 billion + $10 billion) = $5 billion

In the second case, to find the surplus or deficit, we need to subtract the sum of government expenditures, transfer payments, consumption, and investment from GDP, and then subtract the taxes from the result. 
Thus, surplus/deficit = GDP - (government expenditures + transfer payments + consumption + investment) - taxes 
Surplus/deficit = $200 billion - ($30 billion + $20 billion + $120 billion + $40 billion) - $50 billion = $10 billion deficit

Therefore, the answer is D, $5 billion surplus in the first case and a $10 billion deficit in the second case.

You Have Some Estimates of National Accounts Numbers for a Closed