The country of Meditor uses the merit as its currency. Recent national income statistics showed that it had GDP of $700 million merits, no government transfer payments, taxes of $210 million merits, a budget surplus of $60 billion merits, and investment of $100 billion merits. What were its consumption and government expenditures on goods and services?
A)450 million merits and $150 million merits
B)410 million merits and $150 million merits
C)330 million merits and $270 million merits
D)290 million merits and $270 million merits

Question

Quizplus · Accepted Answer

The budget surplus is the difference between taxes and government spending, so government spending is $210 million - $60 million = $150 million merits. GDP = Consumption + Investment + Government Spending, so Consumption = $700 million - $100 million - $150 million = $450 million merits.

The Country of Meditor Uses the Merit as Its Currency