pps/assess QUESTION 10 Answer the question using the following budget informatio
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Question
pps/assess QUESTION 10 Answer the question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public Government Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Spending Tax Revenues GDP $425 $2,000 3,000 4,000 5,000 4,800 5,000 $450 450 600 640 680 620 580 620 Refer to the data. The budget deficit in year 3 is $175 billion O $3,050 billion O $100 billion O $295 billion QUESTION 11 Which of the following fiscal policy changes would be the most contractionary) O A $40 billion increase in taxes O A $10 billion increase in taxes and a $30 billion cut in government speniding O A $20 billion increase in taxes and a $20 billion cut in government spending O A $30 bilion increase in taxes and a $10 billion cut in government spending QUESTION 12 Click Save and Submit to save and submit. Click Save All Answers to save all
Explanation / Answer
10. Budget deficit = Government Spending - Government Tax Revenue = 600 - 500 = $ 100 billion
11. A $ 30 billion increase in taxes and a $ 10 billion cut in government spending.
17. smaller is the economy's MPC
18. By cumulating the annual difference between tax revenue and government spending over the years.
Debt is the sum of budget deficit over year after year.
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