$$\begin{array} { | c | c | c | c | }
\hline & \begin{array} { c }
\text { Government } \
\text { Spending }
\end{array} & \text { Tax Revenues } & \text { GDP } \
\hline \text { Year } 1 & \$ 800 & \$ 825 & \$ 4,000 \
\hline \text { Year } 2 & 850 & 850 & 4,200 \
\hline \text { Year } 3 & 900 & 875 & 4,350 \
\hline \text { Year } 4 & 950 & 900 & 4,500 \
\hline \text { Year 5 } & 1,000 & 925 & 4,600 \
\hline
\end{array}$$ The table contains budget information for a hypothetical economy. All data are in billions of dollars. In which year is there a balanced budget?
A) Year 1
B) Year 2
C) Year 3
D) Year 4

Question

$$\begin{array} { | c | c | c | c | } 
\hline & \begin{array} { c } 
\text { Government } \
\text { Spending }
\end{array} & \text { Tax Revenues } & \text { GDP } \
\hline \text { Year } 1 & \$ 800 & \$ 825 & \$ 4,000 \
\hline \text { Year } 2 & 850 & 850 & 4,200 \
\hline \text { Year } 3 & 900 & 875 & 4,350 \
\hline \text { Year } 4 & 950 & 900 & 4,500 \
\hline \text { Year 5 } & 1,000 & 925 & 4,600 \
\hline
\end{array}$$ The table contains budget information for a hypothetical economy. All data are in billions of dollars. In which year is there a balanced budget?
A) Year 1
B) Year 2
C) Year 3
D) Year 4

Quizplus · Accepted Answer

A balanced budget occurs when government spending equals tax revenues, which is the case in Year 2 ($850 billion in both categories).

The Table Contains Budget Information for a Hypothetical Economy