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Scenario: Open Economy S = I
In an open economy GDP is $12 trillion this year. Consumption is $8 trillion, and government spending is $2 trillion. Taxes are $0.5 trillion. Exports are $1 trillion, and imports are $3 trillion.
-(Scenario: Open Economy S = I) Look at the scenario Open Economy S = I. What is the government budget balance?

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Quizplus · Accepted Answer

The government budget balance is calculated as taxes minus government spending. Here, taxes are $0.5 trillion and government spending is $2 trillion, resulting in a deficit of $1.5 trillion.

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