Let G = government purchases; T = taxes; TR = transfer payments. The budget deficit is defined as:

Question

Quizplus · Accepted Answer

The budget deficit is the amount by which government spending exceeds government revenue in a given period. Therefore, the correct formula for the budget deficit is T - (G + TR) where T represents tax revenue, G represents government purchases, and TR represents transfer payments. Since the budget deficit represents a shortfall in revenue, it should be negative, or less than zero, when calculated using the formula. Therefore, the expression T - (G + TR) < 0 is the correct choice for defining the budget deficit.

Let G = Government Purchases; T = Taxes; TR =