Where Y is GDP, C is consumption, I is investment, G is government purchases, T is net taxes, and there is no international trade, the government budget deficit equals:
A) T - G.
B) Y - G.
C) Y + T - G.
D) G - T.

Question

Quizplus · Accepted Answer

In this closed economy, government purchases (G) minus net taxes (T) is the definition of budget deficit. If this were a negative number, it would be a government surplus.

Where Y Is GDP, C Is Consumption, I Is Investment