Assume that production in the United States is valued at $100,000. National income is therefore $100,000. Of their income, workers save $2,000, pay $6,000 in taxes, spend $89,000 on consumer goods, and spend $2,000 on imports. Businesses spend $5,000 in new investment spending. Foreigners spend $1,000 on exports. To avoid any problems of inflation or unemployment, the government should have a budget deficit or surplus of: a. $2,000 surplus b. $1,000 deficit c. $2,000 deficit d. $1000 surplus e. $o deficit

Assume that production in the United States is valued at $100,000. National income is therefore $100,000. Of their income, workers save $2,000, pay $6,000 in taxes, spend $89,000 on consumer goods, and spend $2,000 on imports. Businesses spend $5,000 in new investment spending. Foreigners spend $1,000 on exports. To avoid any problems of inflation or unemployment, the government should have a budget deficit or surplus of: a. $2,000 surplus b. $1,000 deficit c. $2,000 deficit d. $1000 surplus e. $o deficit

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter27: Multinational Financial Management

Section: Chapter Questions

Problem 5Q: If the United States imports more goods from abroad than it exports, then foreigners will tend to...

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