The government's current period budget constraint is:
A) G + B = T
B) G' = T' + (1 + r)B
C) G = T + B
D) G + T = B
E) G + S = B

Question

Quizplus · Accepted Answer

The correct formula for the government's current period budget constraint is G = T + B, which means that government spending (G) must be equal to taxes (T) plus borrowing (B). Therefore, the best choice is C. Options A, B, D, and E all have incorrect equations for the government's current period budget constraint.

The Government's Current Period Budget Constraint Is