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Home / Questions / Assume that Potential Real GDP equals $10,000. National Income is therefore $10,000. Of th

Assume that Potential Real GDP equals $10,000. National Income is therefore $10,000. Of th

Assume that Potential Real GDP equals $10,000. National Income is, therefore, $10,000. Of this, consumers will pay $2,000 in taxes, save $1,000, and spend $7,000 on consumer goods. Business Investment spending is $2000. In order to avoid recessions and inflation (to have equilibrium), the government should have a:


a. balanced budget
b. budget deficit of $1000
c. budget surplus of $1000
d. budget deficit of $2000

Nov 20 2019 View more View Less

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