Answered: equal to $1,000. What is the value of…

equal to $1,000. What is the value of government purchases? And would the government have a budget deficit or a budget surplus?

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 1.7P

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Question

Suppose that in a closed economy GDP is $11,000, consumption is $7,500, and taxes are s2,000. National savings
equal to $1,000. What is the value of government purchases? And would the government have a budget deficit or
a budget surplus?
$1,000, budget deficit.
$2,500, budget surplus.
$2.500, budget deficit.
$1,000, budget surplus.

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