11. Suppose there are three adjacent countries maintaining their closed economic borders, i.e. Hastina, Mandura, and Ayodya. The government of Hastina sets a lump sum tax of USD 40 trillion and transfers of USD 20 trillion, while also spends USD 30 trillion out of its budget on goods and services. In Mandura, USD 60 trillion of private savings have been accumulated, while investment expenditures reach USD 40 trillion. At the same time, the GDP of Ayodya is USD 300 trillion, while aggregate consumption is USD 180 trillion and investment is USD 90 trillion. It is further known that USD 60 trillion of taxes are collected and transfers of USD 20 trillion has been made. Based on this information, we can conclude that... a. government budget deficit is the largest in Hastina b. government budget deficit is the largest in Mandura c. government budget deficit is the largest in Ayodya d. all three countries have equal government budget deficit

11. Suppose there are three adjacent countries maintaining their closed economic borders, i.e. Hastina, Mandura, and Ayodya. The government of Hastina sets a lump sum tax of USD 40 trillion and transfers of USD 20 trillion, while also spends USD 30 trillion out of its budget on goods and services. In Mandura, USD 60 trillion of private savings have been accumulated, while investment expenditures reach USD 40 trillion. At the same time, the GDP of Ayodya is USD 300 trillion, while aggregate consumption is USD 180 trillion and investment is USD 90 trillion. It is further known that USD 60 trillion of taxes are collected and transfers of USD 20 trillion has been made. Based on this information, we can conclude that... a. government budget deficit is the largest in Hastina b. government budget deficit is the largest in Mandura c. government budget deficit is the largest in Ayodya d. all three countries have equal government budget deficit

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter7: Economic Growth: Theory And Policy

Section: Chapter Questions

Problem 3DQ

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