Question

Under which of the following circumstances would the government be running a deficit?

A) G = $7 trillionT = $7 trillionTR = $0
B) G = $5 trillionT = $7 trillionTR = $1 trillion
C) G = $5 trillionT = $5 trillionTR = $1 trillion
D) G = $7 trillionT = $10 trillionTR = $3 trillion

Answer 1

Under option D, where G = $7 trillion, T = $10 trillion, and TR = $3 trillion, the government would be running a deficit of $4 trillion.

Step-by-step explanation:

Under option D, where G = $7 trillion, T = $10 trillion, and TR = $3 trillion, the government would be running a deficit. This is because the total government spending (G) exceeds the total tax revenue (T) and transfer payments (TR). In this case, the deficit (G - T - TR) would be $4 trillion.