Question

If a government collects $1,400 in tax revenue and spends $1,600, it has a:

a) Deficit of $200
b) Public debt of $200
c) Surplus of $200
d) Balanced budget

Answer 1

The government has a deficit of $200.

Step-by-step explanation:

A government runs a budget deficit when it spends more money than it collects in taxes. In this case, the government collected $1,400 in tax revenue but spent $1,600, resulting in a deficit of $200. Therefore, the correct answer is a) Deficit of $200.