The government of Tinyland spends $30 on domestic products and services. Tax revenue is $60 and transfer payments are $20. Net taxes equal $10.

Question

Quizplus · Accepted Answer

The equation for GDP (Y) is Y = C + I + G + NX, where C is consumption, I is investment, G is government spending, and NX is net exports. In this case, we know that G is $30. However, we do not have any information about consumption (C), investment (I), or net exports (NX), so we cannot determine the value of GDP. Therefore, we cannot determine whether the statement is true or false.

The Government of Tinyland Spends $30 on Domestic Products and Services