Scenario 13-3. Assume the following information for an imaginary, open economy.
Consumption = $1,000; investment = $300; net exports = $100;
taxes = $230; private saving = $200; and national saving = $150.
-Refer to Scenario 13-3. This economy's government is running a
A)budget deficit of $50.
B)budget deficit of $80.
C)budget surplus of $50.
D)budget surplus of $80.

Question

Quizplus · Accepted Answer

Government saving (budget balance) is calculated as national saving minus private saving. Here, national saving ($150) minus private saving ($200) equals -$50, indicating a budget deficit of $50.