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. What is the government budget balance?

Question

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.

In an Open Economy, GDP Is $12 Trillion This Year