Given the average tax rate t,a general expression for the budget deficit is

Question

Quizplus · Accepted Answer

The budget deficit refers to the situation where the government spending is greater than its revenue. If G is the government spending and Y is the revenue, then the deficit is given by G - Y. However, since Y is taxed at a rate of t, the government revenue is actually tY. Therefore, the deficit expression becomes G - tY, which is equivalent to option C.

Given the Average Tax Rate T,a General Expression for the Budget