Scenario 13-2. Assume the following information for an imaginary, closed economy.
GDP = $200,000; consumption = $120,000;
government purchases = $35,000; and taxes = $25,000.
-Refer to Scenario 13-2. For this economy, public saving is equal to
A)$-10,000 and the government is running a budget deficit of $10,000.
B)$-10,000 and the government is running a budget surplus of $10,000.
C)$10,000 and the government is running a budget deficit of $10,000.
D)$10,000 and the government is running a budget surplus of $10,000.

Question

Quizplus · Accepted Answer

Public saving is calculated as taxes minus government purchases, which is $25,000 - $35,000 = -$10,000, indicating a budget deficit of $10,000.