Suppose that in a closed economy GDP is 11,000, consumption is 7,500, and taxes are 500. What value of government purchases would make national savings equal to 2,000 and at that value would the government have a deficit or surplus? 1,500, surplus O 1,500, deficit 1,000, surplus 1,000, deficit

Suppose that in a closed economy GDP is 11,000, consumption is 7,500, and taxes are 500. What value of government purchases would make national savings equal to 2,000 and at that value would the government have a deficit or surplus? 1,500, surplus O 1,500, deficit 1,000, surplus 1,000, deficit

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter31: The Impacts Of Government Borrowing

Section: Chapter Questions

Problem 7RQ: Based on the national saving and investment identity, what are the three ways the macroeconomy might...

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Question

Suppose that in a closed economy GDP is 11,000, consumption is 7,500, and taxes are 500. What value of government
purchases would make national savings equal to 2,000 and at that value would the government have a deficit or surplus?
1,500, surplus
1,500, deficit
O 1,000, surplus
1,000, deficit

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National income is the total value of products and services manufactured in the country during the period.

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