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Tanya [424]
3 years ago
15

Suppose that in an? economy, investment is? $400 billion, saving is? $400 billion, tax revenues are? $500 billion, exports are?

$300 billion, and imports are? $200 billion. what is government expenditure and the government budget? balance?
Business
1 answer:
ludmilkaskok [199]3 years ago
4 0

By definition, government expenditure refers to the money used in the acquisition of goods and services for current use. In this case, the government expenditure is simply equivalent to investment.

<span>Government expenditure =  </span>$400 billion

From economics: I=S+T–G+M–X

Where

I = Investment

S = Savings

T= Tax revenues

G =Government budget

M = Import

X = Export

Rearraging to get G:

G = S – I + T + M – X

G = $400 billion - $400 billion + $500 billion + $200 billion - $300 billion

<span>G = Government budget =  $400 billion</span>

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